ECONOMY
After widespread criticism, govt eases LTCG Tax on realty with two options
- IBJ Bureau
- Aug 07, 2024
The Union government has relaxed new property tax rules it had proposed in the recent Union Budget just two weeks ago. The Long-Term Capital Gains (LTCG) Tax on unlisted assets, including property, was eased after widespread criticism that the changes to the tax had added an already heavy financial burden on the middle class.
On July 23, Finance Minister Nirmala Sitharaman had lowered the LTCG tax on real estate to 12.5 per cent from 20 per cent, but had dropped the indexation benefit that allowed individuals to adjust prices for inflation before the capital gain was calculated.
Now, the government is offering taxpayers the option of using the new rate or the previous 20 per cent rate with the inflation adjustment of indexation for property sold before July 23, 2024.
Real estate assets are considered to be long term if they have been held for at least 24 months.
The change comes after criticism from opposition parties that Prime Minister Narendra Modi’s first Budget since being re-elected for the third term was aimed at increasing the tax burden on the middle class.
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