Centre Revises LTCG Indexation on Real Estate, Offers Relief to Home Buyers
Latest News. The Centre has rolled back its decision to remove indexation benefits on real estate, offering relief to home buyers.
LtcgReal EstateHome BuyersTax IndexationNirmala SitharamanReal Estate NewsAug 06, 2024
The government has moved amendments to the Finance Bill, giving taxpayers the option to calculate capital gains tax on real estate properties. Taxpayers can now choose between two options either calculate liability at 12.5 per cent without indexation, or 20 per cent with indexation.
This move offers relief to those who purchased property before July 23, 2024. The government has essentially offered a choice between retaining old indexation benefits or opting for the new regime.
In the Union Budget 2024, Finance Minister Nirmala Sitharaman had announced the withdrawal of indexation benefits from real estate and lowered the LTCG tax from 20 per cent to 12.5 per cent. Indexation adjusts the purchase price of an asset for inflation, thereby reducing the gains and ultimately the tax liability.
This revision is expected to benefit home buyers who were facing higher tax liabilities due to the withdrawal of indexation benefits. The move is seen as a relief measure for the real estate sector, which has been facing challenges in recent times.
The Centre's decision to revise LTCG indexation on real estate is a welcome move, and it is expected to boost the morale of home buyers and the real estate sector as a whole.
About Nirmala Sitharaman
Nirmala Sitharaman is the current Finance Minister of India. She presented the Union Budget 2024, which included several key announcements, including the withdrawal of indexation benefits from real estate.
About the Finance Bill
The Finance Bill is an annual bill presented by the Finance Minister of India, which outlines the taxation proposals for the upcoming financial year. The bill is debated and passed by the Parliament, and it becomes an Act of Parliament after receiving the President's assent.
About tax indexation
Indexation is the process of adjusting the purchase price of an asset for inflation, which reduces the gains and ultimately the tax liability. Indexation benefits were earlier available to real estate investors, but were withdrawn in the Union Budget 2024.
Frequently Asked Questions
What is LTCG indexation on real estate?
LTCG indexation on real estate is the process of adjusting the purchase price of a property for inflation, which reduces the gains and ultimately the tax liability.
What was announced in the Union Budget 2024 regarding LTCG indexation on real estate?
In the Union Budget 2024, Finance Minister Nirmala Sitharaman announced the withdrawal of indexation benefits from real estate and lowered the LTCG tax from 20 per cent to 12.5 per cent.
What is the revised LTCG indexation on real estate announced by the Centre?
The Centre has revised the LTCG indexation on real estate, offering taxpayers the option to calculate capital gains tax on real estate properties at 12.5 per cent without indexation, or 20 per cent with indexation.
Who will benefit from the revised LTCG indexation on real estate?
The revised LTCG indexation on real estate will benefit home buyers who purchased property before July 23, 2024, and were facing higher tax liabilities due to the withdrawal of indexation benefits.
What is the expected impact of the revised LTCG indexation on real estate on the real estate sector?
The revised LTCG indexation on real estate is expected to boost the morale of home buyers and the real estate sector as a whole, and provide relief to those affected by the withdrawal of indexation benefits.
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