Navigating the New Budget: Capital Gains Tax Changes for NRIs and Residents

CA Arun Tiwari | Last updated: 27 December 2024

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The latest budget has introduced significant changes to capital gains tax, affecting both NRIs and residents selling property. Key changes include the removal of indexation, which previously adjusted purchase prices for inflation, leading to potentially higher taxable gains. However, the capital gains tax rate has been reduced from 20% to 12.5%, which may benefit those with shorter property holding periods. Long-term owners and those with inherited properties might see an increase in their tax liability despite the lower rate, and there's current ambiguity regarding the valuation of older properties. The article suggests reassessing sales of very old properties, leveraging joint ownership, timing sales strategically, and exploring reinvestment options like capital gains bonds or purchasing new homes to defer or eliminate taxes.

Introduction The latest budget has introduced significant changes to tax policies, especially regarding capital gains tax. These changes affect both NRIs and residents planning to sell property, making it crucial to understand how they work. By understanding these updates, you can better plan your

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About the Author

CA Arun Tiwari

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Hi, I am CA Arun Tiwari, A Chartered Accountant, and Ex-EY. My Specialization is Income Tax Litigation including Appeal and NRI Taxation. I undertake Tax litigation matters related to high-pitch income tax assessment and appeal Filing and also guide enterprises for best practices to avoid possible tax litigation by ava ... Read more

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