Simplified Long-Term Capital Gain Tax: A Boon for Real Estate Investors
The recent changes in Long-Term Capital Gain Tax (LTCG) will benefit most real estate investors, according to Revenue Secretary Sanjay Malhotra.
Real EstateLong Term Capital Gain TaxLtcgIncome TaxBudgetReal Estate NewsJul 24, 2024
Malhotra explained that the rate of return on investments in real estate is typically higher than 10-11%, and therefore, the reduced tax rate will benefit most investors in the long term. Additionally, the government has retained the rollover benefit, which allows investors to reinvest their sale proceeds in buying a new house without paying capital gains tax up to ₹1 crore.
The changes to the LTCG tax rate will come into effect from July 23, 2024, and will apply to properties bought or inherited after 2001. The government has, however, retained the indexation benefit for taxpayers on properties bought or inherited before 2001.
In summary, the simplified LTCG tax regime is expected to benefit most real estate investors, particularly those who plan to hold their properties for the long term. With the reduced tax rate and retention of the rollover benefit, investors can now look forward to higher returns on their investments.
Frequently Asked Questions
What is the new Long-Term Capital Gain Tax rate?
The new LTCG tax rate is 12.5%.
What is the indexation benefit in LTCG?
The indexation benefit allows taxpayers to compute gains arising out of the sale of capital assets after adjusting for inflation.
Will the removal of indexation benefit lead to higher capital gain tax?
No, the reduction in tax rates from 20% to 12.5% will more than compensate for the removal of indexation benefits.
What is the rollover benefit in LTCG?
The rollover benefit allows investors to reinvest their sale proceeds in buying a new house without paying capital gains tax up to ₹1 crore.
When will the changes to the LTCG tax rate come into effect?
The changes will come into effect from July 23, 2024.
Related News Articles
South Korea's Finance Minister Pledges to Stabilize Soaring Housing Prices
South Korea's Finance Minister vows to take policy steps to stabilize rising house prices in Seoul and the wider capital area amid increasing volatility in the real estate market.
Shapoorji Pallonji Group Consolidates Real Estate Business Under SPRE
The Shapoorji Pallonji Group has unified its real estate business under SPRE, a move aimed at strengthening its position in India's competitive property market.
RBI Keeps Repo Rate Steady in October 2024 MPC Meeting, Shifts Stance to Neutral
The Reserve Bank of India (RBI) has decided to keep the repo rate unchanged in the October 2024 Monetary Policy Committee (MPC) meeting. The central bank has also shifted its stance to neutral, signaling a cautious approach to future policy decisions. Thi
FPCE Seeks Government Intervention for Realty-Specific Homebuyer Interest Rules
The Federation of Indian Real Estate Developers (FIRE) and the Confederation of Real Estate Developers' Associations of India (CEDAI) have jointly written to the government, urging for specific rules to protect homebuyers' interests in the real estate sec
Macrotech Developers Acquires Bain Capital's Stake in Three Entities for Rs 307 Crore
Macrotech Developers, a leading real estate firm in India, has made a strategic move by acquiring Bain Capital's stake in three industrial and logistics park entities for Rs 307 crore. This acquisition is part of the company’s plan to boost its rental inc
PCMC Contract Worker Arrested in Bribery Case: Water Inspector Remains at Large in Pune
In a significant development, a PCMC contract worker has been arrested in a bribery case, while the water inspector remains on the run. The incident has raised concerns about corruption in public services in Pune, a city known for its rapid growth in real