The overhaul in the LTCG Tax regime done in this year’s budget by reducing the Long term Capital Gains Tax (LTCG) from 20 percent to 12.5 percent while doing away with indexation benefits had adversely impacted the real estate investment scenario, creating apprehensions in the minds of property investors.
However, the amendment proposed by the government in the Finance Bill 2024 in Parliament, reintroducing the indexation benefit, will allay the fears of real estate investors about investment profits, in turn boosting their sentiment. The amendment in the budget proposal, now allows property investors to avail of the old LTCG tax regime provided the property was acquired before July 23, 2024.
On the sale of property, an investor is now given a choice to opt for the old LTCG regime or the new LTCG regime. As such one can now either pay tax at 12.5 percent without the indexation benefit or pay 20 percent tax with the indexation benefit.
This benefit however does not apply to future transactions. But experts like Dhruv Agarwala say that taxpayers will be able to avail more time to plan the sale of their assets to maximise benefits.
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