BAJAJ BROKING
The Union government has provided significant relief to property owners by introducing a choice between two options for long-term capital gains (LTCG) on property: a 20% LTCG tax with indexation or a 12.5% LTCG tax without indexation. This change, included in the Budget 2024 amendments, allows taxpayers to select the option that minimizes their tax liability, offering flexibility and potential savings.
Finance Minister Nirmala Sitharaman initially proposed reducing the LTCG tax on property from 20% to 12.5%, while eliminating the benefit of indexation in Budget 2024. This change was perceived as a setback for homeowners, as indexation adjusts the purchase cost for inflation, thereby reducing taxable gains and overall tax outgo.
However, following widespread discussions and feedback from the real estate sector, the government introduced amendments allowing property owners to choose between the old and new tax rules.
According to the Finance (No. 2) Bill, 2024, taxpayers can opt for either:
This choice ensures that properties bought before July 23, 2024, are not negatively impacted by the new rules, allowing homeowners to calculate their taxes under both schemes and pay the lesser amount.
The decision to opt for indexation benefits or the lower LTCG tax rate should be based on specific financial situations, the holding period of the asset, and the amount of appreciation.
In general, if the property’s value appreciates rapidly, the 12.5% LTCG tax without indexation will likely result in lower tax liability. Conversely, if the appreciation is slower or if there has been significant inflation over a long holding period, the 20% LTCG tax with indexation might be more beneficial.
The new amendments in the Finance Bill, 2024, provide homeowners with a flexible choice to minimize their tax outgo on property sales. Property owners should carefully evaluate their specific circumstances and calculate potential tax liabilities under both the old and new rules to determine the most beneficial option. This strategic choice will ensure optimal tax savings while complying with the latest regulations.
Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing. This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.
For All Disclaimers Click Here: https://bit.ly/3Tcsfuc
Share this article:
7th Pay Commission Leave Rules & Holidays in India
11 Dec, 2024 | 5 Min. read
Wipro Ltd
11 Dec, 2024 | 7 Min. read
Aditya Birla Group
11 Dec, 2024 | 10 Min. read
What is the Lock-in Period in IPO
11 Dec, 2024 | 6 Min. read
Textile Sector in India
11 Dec, 2024 | 11 Min. read
Step-by-Step Guide to Accessing Your Income Tax Assessment Order Online
11 Dec, 2024 | 3 Min. read
IPO vs FPO vs OFS: Key Differences in How Companies Raise Capital
11 Dec, 2024 | 8 Min. read
Gold Price in India - Gold Prices Edge Higher as Futures Hit $2,654.50
11 Dec, 2024 | 39 Min. read
Indian Overseas Bank Secures ₹1,359 Crore Income Tax Refund for AY 2015-16
11 Dec, 2024 | 2 Min. read
HG Infra Secures ₹899 Crore NH-227B Road Upgrade Project in UP
11 Dec, 2024 | 2 Min. read
NTPC Green Energy Secures 500 MW Solar Project with 250 MW ESS from SECI
11 Dec, 2024 | 2 Min. read
Awfis Space ₹583 Crore Block Deal Launches at ₹680 Floor Price
11 Dec, 2024 | 2 Min. read
RBI Launches ULI: Transforming Loan Access
August 27, 2024 | 4 Min. read
Textile Sector in India
September 20, 2024 | 5 Min. read
List of IPOs with DRHPs Filed
November 30, 2023 | 3 Min. read
Aditya Birla Group
September 28, 2023 | 10 Min. read
Bajaj Housing Finance Ltd IPO: Things Smart Investors Need to Know
September 05, 2024 | 4 Min. read
Budget Stock Ideas 2024-2025 | Stocks to Buy Today
July 24, 2024 | 4 Min. read
IPO Eligibility Criteria : Full Details
March 15, 2024 | 6 Min. read
What Is the Lock-In Period in IPOs?
October 18, 2023 | 6 Min. read
Godfrey Phillips Announces 2:1 Bonus Shares
September 16, 2024 | 7 Min. read
Jindal Group- A Comprehensive Analysis
September 27, 2024 | 7 Min. read
Level up your stock market experience: Download the Bajaj Broking App for effortless investing and trading