Centre Revises LTCG Indexation on Real Estate: A Big Relief for Home Buyers
The Centre has rolled back its decision to remove indexation benefits on real estate, giving taxpayers the option to calculate capital gains tax on real estate properties.
LtcgReal EstateHome BuyersTax BenefitsIndexationReal EstateAug 06, 2024
The government has offered a choice between retaining old indexation benefits or opting for the new regime to those who purchased property before July 23, 2024. This means that taxpayers can now calculate their liability at 12.5 per cent without indexation, or 20 per cent with indexation.
The decision to revise the LTCG indexation on real estate comes after the Centre announced the withdrawal of indexation benefits from real estate and lowered the LTCG tax from 20 per cent to 12.5 per cent in the Union Budget 2024.
The indexation benefit adjusts the purchase price of an asset for inflation, thereby reducing the gains and ultimately the tax liability. This move is expected to benefit home buyers who were earlier set to lose out on the indexation benefits.
The revision in LTCG indexation on real estate is a big relief for home buyers, who can now opt for the old regime and claim indexation benefits on their property purchases.
Frequently Asked Questions
What is LTCG indexation on real estate?
LTCG indexation on real estate adjusts the purchase price of a property for inflation, reducing the gains and ultimately the tax liability.
What was the earlier decision on LTCG indexation on real estate?
The Centre had earlier announced the withdrawal of indexation benefits from real estate and lowered the LTCG tax from 20 per cent to 12.5 per cent in the Union Budget 2024.
What are the options available to taxpayers now?
Taxpayers can now calculate their liability at 12.5 per cent without indexation, or 20 per cent with indexation.
Who is eligible for the revised LTCG indexation on real estate?
Those who purchased property before July 23, 2024, are eligible for the revised LTCG indexation on real estate.
How will the revision in LTCG indexation on real estate benefit home buyers?
The revision in LTCG indexation on real estate will benefit home buyers who can now opt for the old regime and claim indexation benefits on their property purchases, reducing their tax liability.
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