look news india
The central government has introduced an amendment in the Finance Bill, 2024, under which taxpayers can choose between 12.5 per cent long-term capital gains (LTCG) tax without indexation or 20 per cent long-term capital gains tax with indexation for immovable properties purchased. An option can be selected before July 23, 2024.
The government has also proposed to bring back unlisted securities bought before July 23 to 10% LTCG. In last month's budget, Finance Minister Nirmala Sitharaman had reduced the long term capital gains tax from 20 per cent to 12.5 per cent. However, indexation benefit was removed for real estate bought in 2001 or after. This means that the seller of real estate will have to pay long term capital gains tax on the entire profit without adjusting for inflation. After this provision of the budget, a wave of concern returned with volatility in the real estate sector.
Due to indexation benefit, a person selling real estate can adjust the impact of inflation while calculating capital gains. The impact of inflation was calculated based on the cost inflation index published by the Central Board of Direct Taxes (CBDT). The base of the index was fixed as April 1, 2001 and its value was 100. According to ANAROCK data, the average price of under-construction properties has increased nearly seven times, while the overall real estate sector has grown nearly four times since 2009.
Nirmala Sitharaman will introduce the Finance Bill for the financial year 2024-25 in the Lok Sabha today i.e. Wednesday for discussion and approval. This bill is necessary to implement the budget proposals, which require the approval of both the Houses of Parliament. The budget presented on July 23 last has been under parliamentary review since the session began on July 22.
No relief announced for listed equity shares or mutual funds
In the amendment introduced on Tuesday, the Finance Minister has not announced any relief for listed equity shares or mutual funds. Similarly, the long-term capital gains tax on unlisted securities purchased before July 2023 has been increased to 10 percent.