In the Finance Bill, Sitharaman proposed a flat long-term capital gains tax of 12.5 percent with no indexation benefits.
Written By Zee Media Bureau|Edited By: Akash Sinha|Last Updated: Aug 07, 2024, 08:02 AM IST|Source: Bureau)
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In relief for property owners, the Finance Ministry is mulling to bring relief for transactions held before July 23, 2024, the date on which the Budget was presented. In the budget, Finance Minister Nirmala Sitharaman has removed the indexation rule on property transactions. The move led to significant discontent with experts pointing out that after the removal of the indexation benefit, sellers will have to pay more taxes.
Seeing the widespread discontent, the NDA government is now planning to offer some relief to the property owners.
Finance Minister Nirmala Sitharaman has proposed an amendment to the Finance Bill, offering significant relief on capital gains tax for property transactions. According to the amendment, taxpayers can choose between a lower tax rate of 12.5 per cent without indexation or a higher rate of 20 per cent with indexation for properties acquired before July 23, 2024, the date the union budget was presented in the Lok Sabha.
Taxpayers can calculate their taxes under both options and select the one with the lower tax liability. This new cut-off date of July 23, 2024, replaces the previous cut-off of 2001, alleviating concerns for long-time property owners.
In the Finance Bill, Sitharaman proposed a flat long-term capital gains tax of 12.5 percent with no indexation benefits. Before it, property transactions used to be taxed at 20 per cent with indexation benefit. Now with the proposed amendments, taxpayers will have a choice like they have in paying income tax under the old structure with deductions or under the new tax structure without deductions.
The proposed amendment will apply not only to real estate transactions but also to unlisted equity transactions, which are done before July 23, 2024. All such transactions will be taxed at 10 per cent long-term capital gains instead of the budget proposal of 12.5 per cent tax.
The Lok Sabha began discussing the Finance Bill after the Appropriation Bill for the central government’s expenditure for 2024-25 was passed by the House on Monday. The passage of the Finance Bill by Parliament will complete the budget process.
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