Following significant public pressure and criticism from the opposition, the government announced a substantial relief measure on Tuesday for individuals who had purchased real estate properties before July 23, 2024. Under the revised Finance Bill of 2024 presented to Lok Sabha members, individuals or Hindu Undivided Families (HUF) who acquired homes before this date can now opt between two tax rates for long-term capital gains (LTCG) tax.
According to the amendments, these individuals can calculate their taxes under the new system at a rate of 12.5%, excluding indexation, or stick to the old scheme at 20% with indexation, choosing the lower tax amount. Furthermore, the government has preserved the indexation benefit for taxpayers with properties acquired or inherited before 2001.
The Budget for 2024-25 initially proposed reducing LTCG from 20% to 12.5% but eliminated the indexation benefits. These new tax rates have been effective as of July 23, 2024. The indexation benefit previously allowed taxpayers to compute gains from the sale of capital assets after adjusting for inflation.
In a related development, the I.N.D.I.A. bloc parties staged a protest on Tuesday at the Parliament premises demanding the reversal of an 18% Goods and Services Tax (GST) on premiums for life and health insurance. Opposition leader Rahul Gandhi criticized the Modi government, highlighting the substantial revenue collected from ordinary citizens who diligently pay health insurance premiums to safeguard against health emergencies.
Gandhi condemned the government’s perceived opportunistic approach towards taxation during crises, emphasizing the need to exempt health and life insurance from GST. Various political parties, including MPS TMC, Congress, AAP, and the NCP (SC), participated in the protest alongside Gandhi.
Leave a comment