The question “will super luxury transactions in real estate dwindle in future?” evokes the response “yes” if the latest budget is any indication. The exemption of capital gains tax with regards to investing in residential properties is now limited to Rs 10 crore.
Sections 54 and 54F of the Income-tax Act, 1961 apply to sale of capital assets such as houses, equity, bonds, gold, and investment with proceeds of sale of residential property. Earlier there was no restriction regarding this. Experts say that this tax exemption has been now limited to Rs 10 crore in the latest budget, which is likely to have an impact on high-value transactions. Many entrepreneurs do such huge deals for tax exemption on long-term capital gains. It is said that there is a possibility that huge transactions will decrease with the recent restriction on this too.
