The government has introduced an amendment to provide relief for taxpayers under the Long-Term Capital Gains (LTCG) regime concerning real estate.
Key Details of the Amendment
Taxpayers now have an option when dealing with long-term capital gains from real estate:
- Lower Tax Rate Option: 12.5% without indexation.
- Higher Tax Rate Option: 20% with indexation.
This applies to properties acquired before July 23, 2024.
Relief for Taxation of Immovable Property
For individuals or Hindu Undivided Families (HUFs) transferring long-term capital assets such as land or buildings:
- Flexibility in Tax Calculation: Taxpayers can calculate taxes using both the new scheme (12.5% without indexation) and the old scheme (20% with indexation).
- Pay the Lower Tax: Taxpayers can choose to pay the lower of the two calculated taxes.
Implications
This amendment aims to provide relief and flexibility for taxpayers, potentially reducing their tax burden on real estate transactions. The dual option allows taxpayers to choose the most beneficial tax computation method.
This move is expected to be a significant relief for real estate owners and investors, offering them more favorable tax treatment for their long-term capital gains.
