Govt listens to citizens on indexation
Good work circle friends
Govt moves an amendment to provide relief for real estate under LTCG regime
◾ Govt to allow taxpayers to avail either a lower rate of 12.5% without indexation or a higher 20% rate with indexation if the property is acquired before July 23, 2024
Relief proposed in respect of taxation of immovable property:
In the case of the transfer of a long-term capital asset, being land or building or both, by an individual or HuF, which is acquired before July 23, 2024, the taxpayer can compute their taxes under the new scheme [@ 12.5% without indexation] and old scheme [@ 20% with indexation] and pay such tax which is lower of the two more
Govt moves an amendment to provide relief for real estate under LTCG regime
◾ Govt to allow taxpayers to avail either a lower rate of 12.5% without indexation or a higher 20% rate with indexation if the property is acquired before July 23, 2024
Relief proposed in respect of taxation of immovable property:
In the case of the transfer of a long-term capital asset, being land or building or both, by an individual or HuF, which is acquired before July 23, 2024, the taxpayer can compute their taxes under the new scheme [@ 12.5% without indexation] and old scheme [@ 20% with indexation] and pay such tax which is lower of the two more
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I am posting a narrative on this roll-back which is posted on social media by CA Chirag Chauhan. (with some modifications). It is a light-hearted take on the LTCG roll-back. QUOTE: Mousi to Jai: Beta, I have got this WhatsApp message that they have restored the indexation benefit for the LTCG. Is it correct Beta? Jai : Yes, Yes Mousi ji, Hon. FM has announced in parliament that they have restored the benefits of indexation. Now in the case of LTCG from the transfer of land and buildings purchased before 23rd July 2024, the tax calculated @12.5% without indexation or @20% with indexation- whichever is lower, would be the tax liability. Mousi : Ok Beta, so all the assets purchased up to 22nd July 2024 would be eligible for indexation, right? Jai : Aree nahi Mousi. Only land and buildings would be eligible for this indexation benefit. Other assets like your jewellery etc. would not be eligible. Mousi : Samjhi, got it. Achha, I have a partnership with Basanti and we have purchased land in that firm. Indexation benefit is available for this land- hai na? Jai : Na,na, na Mousi ji. Indexation benefit has been restored only for individuals and HUFs. Properties purchased by Firms, Companies, Associations etc. are no longer eligible for indexation. Mousi : Hmmm. Okay. My son is now an NRI and he is having a non-agriculture land in Ramgarh. When he will be selling his land, he would be entitled to the benefits of indexation, Theek hai na? Jai : Ab kya kahoon Mousi, even amongst Individuals and HUFs, they are giving the benefit of indexation to only residents. Non-residents will not get the benefit of indexation from now onwards. Mousi : Beta, ek baat aur bata do, If I sell my residential house and claim exemption from capital gains by investing in another house or in Capital Gains bonds, whether I can invest capital gains after indexation to get full exemption? Jai : Ab aisa hai Mousi that Indexation as a concept for calculation of taxable capital gain is gone. It has been brought back only for limited purposes of tax liability determination. So for exemptions u/s. 54,54B and 54EC, the amount invested would be compared with gains without indexation. Even if you have some loss after indexation, this much loss would not be allowed to be carried forward/ adjusted with other capital gains. Mousi : Sahi hai Beta. So what you saying is that indexation would be available but only for land and buildings and not for other assets. If the payer is NR or is a firm/company etc., then indexation would not be available. It would be used for tax calculation but can not be considered for determination of the amount of loss or amount of investment to be done to get full exemption u/s. 54,54B,54EC etc. Beta kya tumhe nahi lagta, that with so many ifs and buts, the law is more complicated now than earlier. Jai : Kamaal hai Mousi. Aap to smajhti hi nahi- You don’t understand. They have mentioned it very clearly in the Finance Bill memorandum that it is an exercise to simplify the act. This is their idea of simplification. P S : Sholay fans may like to add further “ अफ़सोस, मेरे इतना समझाने पर भी आप इसे complicated कह रहीं है , बेचारी मेडम . . . ” UNQUOTE: Things are not the same again. more
Aug 11
A good response by the government. It is not clear how the LTCG on properties will be calculated (with or without indexation?) for most of those who are saving the entire/part amount by way of investing in another property/bonds. For LTCG without indexation, the amount for saving the entire LTCG tax will always be much larger (larger investments) than that with indexation, and the earlier regime benefit will be lost! more
Aug 07
It is a good proposal....moreover, Govt. may consider the withdraw of GST on mediclaim insurance... more
Aug 07
Should this not be done for other asset classes also that have lost the indexation benefit in this budget i.e. debt funds purchased prior to April 1, 2023? more
Aug 07
