Government Proposes Amendment to LTCG Tax on Real Estate Transactions
The government has introduced a change to the Long-Term Capital Gains (LTCG) tax on real estate transactions, scrapping the indexation benefit for properties bought in and after 2001.
Ltcg TaxReal Estate TransactionsIndexation BenefitCapital Gains TaxProperty OwnersReal EstateAug 06, 2024
This decision is likely to impact property owners who were looking to sell their properties and avail the indexation benefit to reduce their tax liability.
The LTCG tax is levied on the gains made from the sale of a capital asset, such as a property, that has been held for a period of more than two years. The indexation benefit allows tax payers to adjust the cost of acquisition of the property to reflect the impact of inflation.
However, with the scrapping of the indexation benefit, tax payers will now have to pay LTCG tax without adjusting for inflation. This is likely to increase the tax liability for property owners.
The government has stated that the amendment is intended to bring parity between the LTCG tax on real estate and other capital assets. The change is expected to be implemented from the next financial year.
The proposed amendment has received mixed reactions from the real estate industry, with some experts welcoming the move and others expressing concerns about its impact on the sector.
The Long-Term Capital Gains (LTCG) tax was introduced in the 2018 budget to tax the gains made from the sale of capital assets, such as properties, that have been held for a period of more than two years. The government of India has been taking measures to rationalize the tax structure and bring parity between different tax regimes.
Frequently Asked Questions
What is LTCG tax?
LTCG tax is a tax levied on the gains made from the sale of a capital asset, such as a property, that has been held for a period of more than two years.
What is indexation benefit?
Indexation benefit allows tax payers to adjust the cost of acquisition of a property to reflect the impact of inflation.
Why has the government scrapped the indexation benefit on real estate transactions?
The government has stated that the amendment is intended to bring parity between the LTCG tax on real estate and other capital assets.
How will the amendment impact property owners?
Property owners will now have to pay LTCG tax without adjusting for inflation, which is likely to increase their tax liability.
When is the amendment expected to be implemented?
The change is expected to be implemented from the next financial year.
Related News Articles
Anchor Suma Clarifies Her Involvement in Real Estate Controversy
Popular anchor Suma issues clarification amid real estate fraud controversy, denies any association with Raki Avenues since 2018.
Tamil Nadu RERA Orders Builder to Refund Homebuyer's Money Without Deductions
Tamil Nadu Real Estate Regulatory Authority directs builder to refund full amount paid by homebuyer without cancellation charges
Max Estates Raises ₹800 Crore through Successful Qualified Institutional Placement
Max Estates Limited, a leading real estate developer in Delhi NCR, has raised ₹800 Crore through a Qualified Institutional Placement (QIP)
AltDRX Appoints Manisheel Gautam as CMO and Shikhar Daydar as CPO
AltDRX, a leading digital real estate investment platform, has announced the appointment of Manisheel Gautam as Chief Marketing Officer and Shikhar Daydar as Chief Product Officer. These additions to the leadership team highlight AltDRX's commitment to tr
WeWork India Secures Major ₹1.38 Crore Monthly Lease in Powai
WeWork India has secured a significant lease agreement for 1.26 lakh square feet of commercial space at Powai, highlighting its strategic expansion in Mumbai's real estate market.
1-Oak's Debut Project Eden@1 Sells Out in Just 15 Days: A Testament to Global Expertise and Local Appeal
In a groundbreaking achievement, international real estate developer 1-Oak's flagship project, Eden@1, has completely sold out within a mere 15 days. This unprecedented success highlights the company's global expertise and strong local appeal.