Proposed Changes to Capital Gains Tax on Real Estate: What You Need to Know
The government has proposed amendments to the capital gains tax on real estate properties, offering taxpayers a choice between two tax options.
Capital Gains TaxReal EstateTax ReformFinance BillLongterm Capital GainsReal Estate MumbaiAug 09, 2024
Initially, the Finance Bill proposed reducing the capital gains tax on land or buildings from 20% to 12.5%, while removing the indexation benefit. This change was set to take effect from July 23, 2024.
However, the amended Finance Bill (No. 2), 2024, introduced a proviso allowing taxpayers transferring long-term capital assets such as land or buildings acquired before July 23, 2024, to choose between two tax options
a. 12.5% tax rate without indexation benefit, or
b. 20% tax rate with indexation benefit, whichever is more advantageous.
Key points to note are
a. This benefit is available to resident individuals and Hindu Undivided Families (HUFs).
b. The relaxation applies specifically to real estate properties (land or buildings).
c. The property must have been held for at least 24 months to qualify as a long-term capital asset.
d. The property must have been acquired before July 23, 2024.
The proposed changes aim to provide relief to taxpayers who have invested in real estate properties. It is essential to note that the new provisions will have a significant impact on the tax liability of individuals and HUFs who have invested in real estate.
Information
The Finance Bill (No. 2), 2024, was presented by the Hon'ble Finance Minister Nirmala Sitharaman on July 23, 2024. The bill aimed to make significant changes to the tax laws in India.
The Finance Minister, Nirmala Sitharaman, has been instrumental in introducing several tax reforms in India. The Finance Bill (No. 2), 2024, is another step towards simplifying the tax laws and providing relief to taxpayers.
Frequently Asked Questions
What are the proposed changes to the capital gains tax on real estate?
The proposed changes include reducing the capital gains tax on land or buildings from 20% to 12.5% and allowing taxpayers to choose between two tax options: 12.5% tax rate without indexation benefit or 20% tax rate with indexation benefit.
Who is eligible for the proposed changes?
The proposed changes are available to resident individuals and Hindu Undivided Families (HUFs) who have invested in real estate properties.
What is the condition for a property to qualify as a long-term capital asset?
The property must have been held for at least 24 months to qualify as a long-term capital asset.
When will the proposed changes take effect?
The proposed changes will take effect from July 23, 2024.
How will the proposed changes impact taxpayers?
The proposed changes will provide relief to taxpayers who have invested in real estate properties and will have a significant impact on their tax liability.
Related News Articles
Apply Now for Law Clerk-Cum-Research Assistant Position at UP-RERA
The Uttar Pradesh Real Estate Regulatory Authority (UP-RERA) is seeking qualified candidates for the position of Law Clerk-Cum-Research Assistant. Applications are due by October 15, 2024.
MPCB Prohibits New Ready-Mix Concrete Plants in MMR to Combat Air Pollution
In response to deteriorating air quality, the Maharashtra Pollution Control Board (MPCB) has issued a ban on the establishment of new ready-mix concrete plants in the Mumbai Metropolitan Region (MMR).
Environmental Clearance Order Puts 200 Mumbai Real Estate Projects on Hold
The environmental clearance order has brought 200 real estate projects in Mumbai to a standstill, leaving developers and buyers in a state of uncertainty. With the real estate market already under pressure, the stakeholders are struggling to navigate the
Panchshil Realty Affiliate Acquires Valuable Land Parcels in Navi Mumbai
Panchshil Realty's affiliate has made a significant investment by acquiring land parcels worth Rs 615 crore in Navi Mumbai. As property prices in the region hover around Rs 20,465 as of December 2024, this move underscores the company's bullish stance on
MahaRERA Enforces Prominent Display of QR Code and Registration Number in Real Estate Ads
MahaRERA, the regulatory authority for the real estate sector in Maharashtra, has mandated that all real estate advertisements prominently display the QR code and registration number. This move aims to enhance transparency and protect potential buyers from fraudulent practices.
REITs and Private Equity Firms Drive Over $1 Billion in Real Estate Deals in Q1 2025
India's real estate sector witnessed a significant boost in the first quarter of 2025, with over $1 billion in high-value transactions spearheaded by REITs and global private equity firms.