Delhi NCR-based real estate developer DLF Limited has stated that the recent removal of the indexation benefit from the capital gains tax regime will not significantly impact its sales.
The central government’s changes in the Union Budget 2024, which include eliminating indexation benefits for calculating capital gains and reducing the Long-Term Capital Gains (LTCG) tax rate, have raised concerns among some real estate experts. Despite this, DLF remains optimistic.
Ashok Tyagi, MD and CEO of DLF, mentioned in an investor call on July 26 that while the budget has generated considerable discussion, the removal of indexation benefits is not expected to heavily affect sales behavior.
“The budget was obviously a very interesting budget. There has been lot of noise around indexation (removal) but once the noise is filtered out I don’t think It has too much of a bearing on the way the sales behaviour will be,” Ashok Tyagi, MD and CEO, DLF Limited, said in an investors call on July 26.
DLF reported a 23% year-on-year increase in net profit, reaching ₹646 crore for the quarter ending June 30, 2024, up from ₹526.11 crore in the previous year. The company’s sales bookings surged over three-fold to ₹6,404 crore in the first quarter of this fiscal year compared to ₹2,040 crore a year earlier.
For the financial year 2024-25, DLF has set a sales target of ₹17,000 crore. The reduction in the LTCG tax rate from 20% to 12.5% announced in the budget, along with the removal of indexation benefits, marks a significant shift.
