Simplification, Not Tax Burden: FM Sitharaman on Removal of Indexation on Real Estate
FM Sitharaman explains the government's decision to remove indexation benefits from real estate, citing simplification as the motive behind the move.
Real EstateLtcgIndexation BenefitsTax ReformNirmala SitharamanReal EstateAug 07, 2024
The Finance Minister also emphasized that the government's intention was not to impose an additional tax burden on taxpayers. Instead, the goal was to provide a more streamlined and efficient tax system. Sitharaman highlighted that the changes to the long-term capital gains (LTCG) tax were designed to eliminate unnecessary complexities and provide taxpayers with a more straightforward option.
The controversy surrounding the removal of indexation benefits for real estate began when the government announced the changes in the Budget 2024. The decision to withdraw indexation benefits for real estate and lower the LTCG tax from 20% to 12.5% sparked protests from various quarters, with some critics labeling it as an anti-middle class move.
However, Sitharaman maintained that the government's intentions were misinterpreted and that the changes were indeed aimed at simplifying the tax process. She also pointed out that discussions on capital gains tax had been
Frequently Asked Questions
What was the government's reason for removing indexation benefits from real estate?
The government removed indexation benefits from real estate to simplify the tax process, not to increase revenue.
How will the changes to LTCG tax affect taxpayers?
The changes to LTCG tax will provide taxpayers with a more straightforward option and eliminate unnecessary complexities.
Can taxpayers choose between the old and new tax regimes for property purchases made before July 23, 2024?
Yes, taxpayers can opt for either the old scheme with indexation and a 20% tax rate or the new scheme with no indexation and a 12.5% tax rate.
What is the role of the Ministry of Finance in formulating economic and financial policies?
The Ministry of Finance is responsible for the formulation of economic and financial policies of the Government of India and is divided into five departments.
Is the removal of indexation benefits for real estate an anti-middle class move?
According to FM Sitharaman, the removal of indexation benefits for real estate is not an anti-middle class move, but rather a step towards simplifying the tax process.
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