Indian real estate leaders have welcomed the government’s decision to give the option to taxpayers to choose between 12.5 per cent Long-Term Capital Gains (LTCG) and 20 per cent LTCG with indexation benefit for properties purchased before July 23, 2024.
The move is expected to have profound impact on both homeowners and aspiring homebuyers.
Welcoming the announcement, Samir Jasuja, Founder and CEO of PropEquity, stated that freedom given to taxpayers to choose between the two LTCGs is a positive development for the real estate sector.
“It addresses the apprehensions among property owners that they will have to shell more taxes in the absence of indexation benefit. Real estate has always been an important asset class for investment and if we have to make real estate a trillion-dollar industry than lesser taxes should be introduced.”
Commenting on the new provision, Sanjoo Bhadana, Founder & MD, 4S Developers, said, “The decision provides flexibility to property owners, allowing them to carefully evaluate their financial situation and select the tax option whenever they plan to sell. It has removed the apprehensions among property owners that the new LTCG would have led to higher tax outgo.
“Now, depending on individual circumstances, one option might offer significant tax savings compared to the other. The amendments in the Finance Bill certainly adds a layer of positivity for the real estate market.”
Vijay Harsh Jha, founder and CEO, VS Realtors (I) Pvt Ltd, a Gurugram-based property brokerage firm, stated that the amendment in LTCG has given home owners the option to make an informed choice by opting for a method that involves a lesser tax outgo. The real estate sector is quite enthused with this change in policy and we hope that real estate transactions are not impacted.
Sharing his views, Mohit Jain, Managing Director, Krisumi Corporation, stated that the new amendment enables property owners to strategically plan their sales, paying the lower of the two tax rates.
“This change provides much-needed relief for property owners and, consequently, the real estate industry, a significant employment generator in the economy. It also allows for more stability in the real estate market.”