Business News
2 min read | Updated on July 24, 2024, 19:08 IST
SUMMARY
The Budget has lowered the LTCG from 20% to 12.5% but removed the indexation benefits. The indexation benefit allowed taxpayers to compute gains arising out of the sale of capital assets after adjusting for inflation.
Union Budget has lowered the LTCG from 20% to 12.5%
Revenue Secretary Sanjay Malhotra on Wednesday said the changes in Long-Term Capital Gain Tax (LTCG) announced in the Budget by Finance Minister Nirmala Sitharaman will benefit most of the people investing in the real estate sector.
The Budget has lowered the LTCG from 20% to 12.5% but removed the indexation benefits.
The indexation benefit allowed taxpayers to compute gains arising out of the sale of capital assets after adjusting for inflation.
The proposal has raised apprehensions that a person selling his property will have to pay a higher capital gain tax.
"This is mostly a simplification exercise. Some people have expressed apprehension on the removal of indexation. I want to allay their concerns that while indexation has been removed at the same time the tax rates have been substantially reduced from 20% to 12.5%. This will benefit most of the people investing in real estate in the long term as the rate of return is more than 10-11%," Malhotra told PTI in an interview.
There will also be a rollover benefit, he said adding that," if you are reinvesting the sale proceeds in buying a house, then there is no tax on capital gains up to ₹1 crore gains".
As per the changes brought in the 2024-25 Budget, the government has retained the indexation benefit for taxpayers on properties bought or inherited before 2001. The changes in the tax rate have been made effective from July 23, 2024.
About The Author
Next Story