No Plans to Review Long-Term Capital Gains Tax for Real Estate Sector
The government has clarified that it will not review the new capital gains tax regime for sale of property, which has sparked concerns about its impact on the real estate sector.
Real EstateCapital Gains TaxIncome TaxTax CertaintyDirect Tax CodeReal Estate MumbaiJul 25, 2024
There are concerns that this move could increase the tax incidence and negatively impact real estate transactions and the construction sector. However, the government believes that the new regime would simplify the tax structure and remove arbitrage among asset classes.
The government has also clarified that the profit made from selling shares and selling property should not be treated differently. Malhotra pointed out that in the case of property, there is already a provision that allows sellers to buy another property without paying tax.
The changes to the capital gains tax structure are part of a broader effort to revamp the tax regime. The government has also announced plans to review the Income Tax Act, which may lead to further changes.
One of the concerns raised by taxpayers, investors, and experts is about tax certainty. However, Malhotra has assured that the government is committed to providing tax certainty and that the changes made to the capital gains tax regime would remain in place.
The government is also considering reducing TDS rates as part of the review of the Income Tax Act. This move is likely to benefit taxpayers and investors.
In the meantime, the government is engaging with stakeholders on the adoption of Pillar 1 and Pillar 2 GloBE rules, which are part of a global effort to address tax challenges arising from digitalization.
Information
The Department of Revenue is a government agency responsible for formulating policies related to direct and indirect taxes. Sanjay Malhotra is the current Secretary of the Department of Revenue.
ICICI Bank is a leading private sector bank in India. Infosys, Wipro, and LTIMindtree are major IT companies in India. Tech Mahindra is a leading IT company in India. IndiGo is a leading airline in India.
Frequently Asked Questions
Will the government review the long-term capital gains tax regime for real estate?
No, the government has clarified that it will not review the new capital gains tax regime for sale of property.
How will the new capital gains tax regime impact real estate transactions?
The government believes that the new regime will result in reduced tax incidence for most sellers, although it may lead to an increase for some.
What is the government's stance on tax certainty?
The government is committed to providing tax certainty and has assured that the changes made to the capital gains tax regime would remain in place.
Is the government planning to reduce TDS rates?
Yes, the government is considering reducing TDS rates as part of the review of the Income Tax Act.
What is the status of the adoption of Pillar 1 and Pillar 2 GloBE rules?
The government is engaging with stakeholders on the adoption of Pillar 1 and Pillar 2 GloBE rules, which are part of a global effort to address tax challenges arising from digitalization.
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