News

Published: August 7, 2024
Updated: August 7, 2024

Government Announces Relief for Home Buyers: Revised LTCG Indexation on Real Estate

Relief for Home Buyers

In a significant move, the government has amended the Long-Term Capital Gains (LTCG) regime for real estate, offering substantial relief to home buyers. Taxpayers can now choose between a lower tax rate of 12.5% without indexation or a higher rate of 20% with indexation for properties acquired before July 23, 2024.

Flexibility in Tax Computation

Individuals or Hindu Undivided Families (HuFs) can compute their taxes under both schemes and pay the lower amount. This flexibility is applicable to all property transactions finalized prior to the Budget's presentation on July 23.

Key Changes

- Removal of indexation benefits for real estate transactions
- Reduction of long-term capital gains (LTCG) tax from 20% to 12.5%
- Properties acquired before 2001 will continue to benefit from indexation
- Recent acquisitions will be subject to the new rules

Impact on Home Buyers

The updated regulations will come into effect on July 23, 2024. Home buyers who complete transactions before the mentioned date will not be impacted by the new regulations. The changes aim to reduce the tax liability for home buyers and provide relief on long-term capital gains for immovable property.

The government's decision to revise the LTCG indexation on real estate is a welcome move for home buyers. The flexibility in tax computation and the reduction in tax rates will provide significant relief to individuals and HuFs. This change is expected to boost the real estate sector and benefit home buyers in the long run.