Quick Summary
In a notable shift in tax policy, the Indian government has proposed an amendment allowing property buyers to choose between two tax calculation methods for long-term capital gains (LTCG) under the Finance Bill, tabled in the Lok Sabha on August 6. This new provision will impact transactions involvi
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FAQ :
Property buyers can now choose between two methods for calculating long-term capital gains (LTCG) tax on properties acquired before July 23, 2024.
Taxpayers can opt for the old scheme, which has a 20% tax rate with indexation benefits, or a new scheme with a reduced 12.5% rate but without indexation.
Indexation adjusts the purchase price of an asset for inflation, which effectively reduces the taxable capital gains and lowers the tax owed.
Individuals and Hindu Undivided Families (HUFs) who acquired land or buildings before July 23, 2024, can compute their taxes under both schemes and pay the lower amount.
The amendment is a response to concerns and criticism following the Budget 2024 announcement, which initially removed indexation benefits, aiming to balance tax simplification with taxpayer relief.
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