In a massive development today that will have nation-wide ramifications, the PM Narendra Modi-led NDA government has proposed amendments to the Finance Bill and these may well bring much relief for the real estate sector. The changes proposed are in respect of taxation on immovable property. That indicates a person can pay his income tax under the new scheme or the old tax regime as well as pick whichever is lower.
In real estate transactions, taxes will be computable either at 12.5% Long-term Capital Gains Tax (LTCG) rate without indexation or 20% with indexation.
Relief may be obtained on property that has been acquired before 23rd July, 2024. The relief will apply on land, buildings or both.
In a post on X, PTI confirmed the development, “Govt moves amendments to Finance Bill, giving taxpayers option to calculate capital gains tax on real estate properties.”
It went on to add, “Taxpayers can calculate liability at 12.5pc without indexation, or 20 pc with indexation, pay tax on lower of the two.”
More than that, options will be provided for the transfer of long term capital assets for both individuals and HUFs.
This move comes in the wake of much opposition from all quarters following the Budget 2024 proposal to get rid of the indexation benefits. The real estate sector stakeholders had warned that this move by the government would lead to incalculable harm to the segment.
What the govt said on Budget day
During her Budget speech, Finance Minister Nirmala Sitharaman had said that the NDA government was proposing to remove all indexation benefits available to property owners. Protests had erupted almost immediately as the consequences of the move became apparent.
The fears widely expressed included the likelihood of taxpayers having to bear a heavier tax load and that this would cause a surge in illegal transactions in the real estate sector, which is already beset with the problem of black money.
Notably, these are not the only amendments proposed by the government. There are as many as 25 of them and the same will likely be presented by FM Sitharaman in Parliament during discussions on the Finance Bill.
The PM Narendra Modi-led NDA government has proposed amendments in the Finance Bill that is set to benefit taxpayers and the real estate sector. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
