- The central government has provided two options..
- Opportunity to choose between a new tax regime without indexation or a tax regime with indexation benefits.
The central government has provided relief regarding the decision to remove indexation benefits for property purchases. For properties bought before July 23, 2024, individuals will have the option to either pay taxes based on the real estate indexation benefits or use the newly introduced lower tax rates without indexation. Amendments have been made to the relevant bill in this regard.
Officials explained that for a person or an undivided Hindu family transferring long-term capital assets like land or buildings purchased before July 23, 2024, the government will allow payment according to the old or new tax regime, whichever is lower.
Recently, the central budget removed indexation benefits on long-term capital gains, reducing the tax rate from 20% to 12.5%. However, this move faced criticism from the real estate industry, with many describing it as unfavourable to the middle class. Additionally, the removal of indexation benefits has increased the tax burden on real estate owners, particularly those with residential properties. The decision has also led to losses in real estate stocks. In response, the central government has made amendments to address these concerns.
