Real estate leaders applaud capital gains tax amendment as a boost for sector
Aug 07, 2024
New Delhi [India], August 7 : Real estate industry leaders hailed the proposed amendment by Finance Minister Nirmala Sitharaman in the Finance Bill to give big relief on capital gains tax in property transactions.
The industry leaders called it a step in the right direction and stated that the proposed amendment will drive investment in the real estate sector and will also boost sales across all housing segments.
"The government's initiative to allow taxpayers the option to compute taxes either at 12.5 per cent without indexation or at 20 per cent with indexation on real estate transactions is a significant step forward. This relief applies to the transfer of long-term capital assets, such as land or buildings, acquired before July 23, 2024" said Niranjan Hiranandani, Chairman, Hiranandani Group and NAREDCO.
Finance Minister Nirmala Sitharaman on Tuesday proposed an amendment in the Finance Bill to give big relief on capital gains tax in property transactions. The proposed amendment implies that taxpayers on property transactions can avail of either a lower tax of 12.5 per cent without indexation or a higher rate of 20 per cent with indexation, if the property is acquired before July 23, 2024, the day the union budget was presented in the Lok Sabha.
Hiranandani further added "By enabling taxpayers to choose the lower tax burden between the new and old schemes, the amendment is poised to drive investment and enhance sales across housing segments. We are grateful for the Finance Minister's forward-thinking approach in implementing these beneficial measures".
Ritesh Mehta, Senior Director/Head, North, East & West, Residential Services, India, JLL also stated "It is a welcoming move by the government, which will not hinder the current optimistic sentiment. This amendment will especially give relief to middle-class people who are quite sensitive about any tax policy changes and the changes in financial structure. This will keep the cycle of selling and buying intact, and we will see more liquidity and optimism in the Real Estate sector".
After the amendment, the taxpayers can compute taxes under both schemes and will have a choice to pay tax under the scheme in which it is lower. July 23, 2024, is now set as the cut-off date for the calculation of the capital gains versus the earlier cut-off of 2001 that had caused a lot of concern over its impact on long-time owners of property assets.
The proposed amendment will apply not only to real estate transactions but also to unlisted equity transactions, which are done before July 23, 2024. All such transactions will be taxed at 10 per cent long-term capital gains instead of the budget proposal of 12.5 per cent tax.
