Now, individuals or HUFs can opt to pay LTCG tax under the new scheme without indexation or claim the indexation benefit.
Published Aug 07, 2024 | 7:56 PM ⚊ Updated Aug 07, 2024 | 7:56 PM
Nirmala Sitharaman presenting the Union budget.
Finance Minister Nirmala Sitharaman on Wednesday, 7 August, said the contentious LTCG tax proposal on real estate is being amended to give the option to taxpayers to compute tax liability under the old system or at reduced rates without indexation and pay the lower of the two.
Replying to a debate on the Finance Bill, Finance Minister Nirmala Sitharaman said the rollover benefit will be available to taxpayers who buy new immovable property utilising the capital gains on the sale of old property.
The Budget 2024-25 proposal to remove indexation benefit in the calculation of long-term capital gains on the sale of immovable properties evoked sharp criticism from various corners, including opposition parties and tax professionals.
The Budget, presented on 23 July, had proposed a lower 12.5 percent rate of LTCG tax, down from 20 percent, while doing away with the indexation benefit.
The major amendment in the Bill relates to the restoration of indexation benefit on the sale of properties bought prior to 23 July, 2024.
Now, individuals or HUFs who bought houses before 23 July, 2024, can opt to pay LTCG tax under the new scheme at the rate of 12.5 percent without indexation or claim the indexation benefit and pay 20 percent tax.
Sitharaman said that the indexation benefit was proposed to be removed from the Budget to bring all asset classes under one rate and not to enhance revenue.
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