There’s been a significant development regarding the indexation benefit on Long-Term Capital Gains (LTCG) from the sale of properties.
Key Points:
Budget 2024 Proposal: Initially, the Finance Minister proposed reducing the LTCG tax on property to 12.5% from 20% while completely removing the indexation benefit.
Public Outcry: This proposal faced strong opposition from the real estate sector and other stakeholders.
Government’s Response: In response to the public outcry, the government has introduced a choice for taxpayers:
Option 1: Pay a 12.5% LTCG tax without indexation benefit.
Option 2: Pay a 20% LTCG tax with indexation benefit.
Eligibility: This choice is available for properties acquired before July 23, 2024.
Benefits of the Change:
Taxpayer-friendly: The government’s decision provides taxpayers with flexibility to choose the option that best suits their financial situation.
Relief for Homeowners: The option to retain the indexation benefit offers significant relief to homeowners.
Boost to Real Estate Sector: The amendment is expected to positively impact the real estate market.
It’s important to note that this change is still in the form of a proposed amendment and needs to be passed by the Parliament to become law.
Would you like to know more about how to calculate your LTCG under the new options or understand which option might be better for you?