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The new rates have come into effect from July 23, 2024. (Representational image)
In addition to the real estate tax relief, the government has also proposed maintaining the long-term capital gains (LTCG) tax rate at 10 per cent for unlisted securities
The government on Tuesday on Tuesday proposed relief for individuals who purchase houses before July 23, 2024, by offering them the choice between two tax rates for long-term capital gains (LTCG) tax.
The Budget 2024-25 had suggested reducing the LTCG rate from 20% to 12.5% while eliminating indexation benefits. The new rates will apply from July 23, 2024. Indexation benefits previously allowed taxpayers to adjust gains from the sale of capital assets for inflation.
As per the amendments to Finance Bill, 2024, circulated to the Lok Sabha members on Tuesday, individuals or HuF who bought houses before July 23, 2024, can compute his/her taxes under the new scheme [@12.5 per cent without indexation] and old scheme [@20 per cent with indexation] and pay such tax which is lower of the two.
As per CNBC-TV18 report, in addition to the real estate tax relief, the government has also proposed maintaining the long-term capital gains (LTCG) tax rate at 10 per cent for unlisted securities acquired before July 23, 2024. This is a reversal from the Finance Bill’s earlier proposal to increase the rate to 12.5 per cent.
The move comes in response to criticism regarding the Union Budget proposal, which sought to remove the indexation benefit on LTCG for unlisted assets.
“The amount of income-tax on long-term capital gains arising from the transfer of a capital asset, being unlisted securities or shares of a company not being a company in which the public are substantially interested, as computed without giving effect to the first and second provisos to section 48, calculated on such long-term capital gains,— (A) at the rate of ten per cent, for any transfer which takes place before the 23rd day of July, 2024; and (B) at the rate of twelve and one-half per cent, for any transfer which takes place on or after the 23rd day of July,” CNBC-TV18 reported.
It should be noted that LTCG relief applies only to immovable assets (houses, land, buildings) and unlisted securities. No relief is proposed for listed equity shares or equity-oriented mutual funds.