Budget 2024: Capital gains taxes hiked, indexation benefit discontinued for property sale

 

The scrapping of the indexation benefit on property sale will have a huge impact on the real estate market

Finance Minister Nirmala Sitharaman on Tuesday announced an increase in both long-term and short-term capital gains tax. The government has also proposed to do away with the indexation benefit for sale of property, which allowed property owners to adjust their gains for inflation.

While the short-term capital gains tax has been increased from 15 per cent to 20 per cent, LTCG will be flat at 12.5 per cent.

Explore tax impact, key announcements, sectoral analysis & more from Union Budget 2024, only on HT. Read now!

Deepak Shenoy, the founder of Capital Mind, said the scrapping of the indexation benefit will have a huge impact on the real estate market.

"People who have held for 15 years and seen their prices double or such, would otherwise have not paid any capital gains tax due to indexation," he wrote on X.

Earlier, the tax on long-term gains for property sale was 10 per cent.

As per definition, any profit or gain that arises from the sale of a 'capital asset' is a capital gain.

On the positive side, for the benefit of the lower and middle-income classes, Nirmala Sitharaman proposed to increase the limit of exemption of capital gains on certain listed financial assets from ₹1 lakh to ₹1.25 lakh per year.

Listed financial assets held for more than a year are classified as long-term, while unlisted financial assets and all non-financial assets will have to be held for at least two years to be classified as long-term.

Also read: Rahul Gandhi slams Nirmala Sitharaman's Budget: ‘To appease...’

"Unlisted bonds and debentures, debt mutual funds and market-linked debentures, irrespective of the holding period, however, will attract tax on capital gains at applicable rates," Sitharaman said in her Budget speech.

All these proposals will come into force immediately.

Also read: Budget: Centre proposes to increase STT, capital gains tax

Elaborating on the government's decision, Nirmala Sitharaman said they wanted to simplify the approach to taxation, including the capital gains taxes.

"Second, if anything, the average taxation has come down when we say it is 12.5%. We have worked out for each of the different asset classes...The point that we brought it down from below the average to 12.5% encourages investment in the markets," he added.


Comments

Post a Comment

Popular posts from this blog

Senior Citizen Train Ticket Discount: Government has issued a new statement regarding giving discount to senior citizens on train tickets, know the details here

Image
  Senior Citizen Train Ticket Discount: Once again a demand has been made in the Lok Sabha to give discount to senior citizens on train tickets. Senior Citizen Train Ticket Discount:  Railways has withdrawn the discount given to senior citizens on train tickets since the Corona period. However, from time to time there has been a demand to restore this concession given to senior citizens in trains. Even in the winter session of the Lok Sabha, some members raised the demand for increasing fare concessions and facilities for senior citizens traveling in trains. However, even before this, Railway Minister Ashwini Vaishnav has told in the Lok Sabha that during the train journey, every passenger is given an average subsidy of 53 percent on the train ticket. Apart from this, he also told who gets discount on tickets while traveling by train. Demand for discount in train tickets raised again During Zero Hour in the House, Janata Dal (United) MP Kaushalendra Kumar said that before the ...
Read more

Cash Transaction Rules: Income tax rules on cash transaction between Husband-Wife and Son-Father, know rules

Image
  Cash Transaction Rules: Income tax keeps an eye on our every transaction. But is there any tax on cash transactions or can Income Tax send a notice? Or how much cash transaction can take place between you and your wife or between father and son? If you also have these questions in your mind, then let us know their answers… If you also transact money between father and son or between husband and wife, then this news is useful for you. Actually, every transaction of ours has an eye on income. In such a situation, a question arises in the minds of many people whether income tax notice can be received even on cash transactions? Let us know how much cash transaction you can do in your family. Income tax sends notice? According to tax experts, if you give money every month for household expenses or give money as a gift, then the wife is not liable for income tax. Both these types of amounts will be considered as the income of the husband. The wife will not receive any notice from the I...
Read more

Have a Current/Savings Bank Account? Know the Cash Deposit Limits under Income Tax Act to avoid Penalties and Notices

Image
  Adhering to cash deposit and withdrawal limits is crucial to remain compliant with the Income Tax Act in India. This article aims to elucidate the various facets of cash-related regulations, encompassing savings and current accounts, fixed deposits, credit card bill payments, real estate transactions, and more.  Cash Deposit Limits in Savings and Current Accounts The Indian Income Tax Act imposes specific regulations on significant cash deposits in savings accounts. Individuals accumulating INR 10 lakh or more during a fiscal year must notify tax authorities.  For current accounts, this threshold is set higher at INR 50 lakh. Although not immediately taxed, financial institutions report transactions exceeding these limits.  Cash Withdrawal and TDS under Section 194N  Section 194N outlines TDS rules for cash withdrawals. A 2% TDS is levied on withdrawals exceeding INR 1 crore within a fiscal year. Non-filers face a 2% TDS on withdrawals over INR 20 lakh and a 5...
Read more