Govt set to restore indexation benefit for property, a relief to homeowners
Finance minister Nirmala Sitharaman to propose amendments to the Finance Bill 2024, offering tax relief to taxpayers and boosting the real estate industry.
PropertyReal EstateTax ReliefIndexation BenefitCapital Gains TaxReal Estate NewsAug 06, 2024
Finance minister Nirmala Sitharaman is expected to propose amendments to the provisions of the Bill on Wednesday in Parliament in order to offer the tax relief. By enabling taxpayers to choose the lower tax burden between the new and old schemes, the amendment is poised to drive investment and enhance sales across housing segments.
The plan is to allow those selling assets bought before 23 July 2024 to compute their capital gains tax obligation in either the earlier or the new tax schemes, whichever suits them. This restores the indexation benefit available on sale of property.
Frequently Asked Questions
What is the indexation benefit in capital gains tax?
The indexation benefit refers to adjusting the purchase price of an asset for inflation while computing the capital gains tax.
What is the new proposal in the Finance Bill 2024?
The new proposal allows taxpayers to choose the lower tax burden between the new and old schemes, restoring the indexation benefit available on sale of property.
Who will benefit from this proposal?
Taxpayers who sell assets bought before 23 July 2024 will benefit from this proposal, as they can compute their capital gains tax obligation in either the earlier or the new tax schemes, whichever suits them.
What is the impact of this proposal on the real estate industry?
The proposal is expected to drive investment and enhance sales across housing segments, according to Niranjan Hiranandani, chairman of Hiranandani Group and NAREDCO.
What is the comprehensive review of the Income Tax Act announced by the finance minister?
The comprehensive review of the Income Tax Act is expected to simplify and rationalise the tax regime, and is expected to be completed in six months.
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