In Budget, Nirmala Sitharaman declared withdrawal of indexation benefits from real estate and brought down the long-term capital gains (LTCG) tax from 20% to 12.5%.
The Centre has moved an correction allowing long- term capital earnings levies on property purchases made before July 23, 2024, to be calculated under the new 12.5 per cent rate without indexation and the old 20 per cent rate with indexation. As per the correction introduced by the government following Budget 2024 advertisement by Finance minister Nirmala Sitharaman taxpayers can choose the further favourable option of the two mentioned over. This change will be introduced in Finance bill .
What Nirmala Sitharaman declared in Budget 2024?
In Budget 2024, Nirmala Sitharaman declared pullout of indexation benefits from real estate and lowered the long- term capital earnings( LTCG) duty from 20 to 12.5. This was blamed by industry experts who refocused out that a large number of real estate possessors- especially those retaining domestic property- may see a significant increase in their duty burden once new governance kicks in.
Revenue secretary Sanjay Malhotra had defended the offer to remove indexation benefits from LTCG on real estate at the time and said that other asset classes, including inflows from shares, interest and fixed deposits do n't enjoy the same benefit. The move should be seen as a simplification measure, he'd also said.
Then are the changes the government has proposed for real estate sector?
As per the amendments to Finance Bill, 2024, following are the changes :
1. individualities or HuF who bought houses before July 23, 2024 can cipher his/ her levies under the new scheme at 12.5 per cent without indexation.
2. individualities or HuF who bought houses before July 23, 2024 can cipher his/ her levies under the old scheme at 20 per cent with indexation.
3. individualities can choose to pay the duty which is lower of the two.
