Centre Moves Amendment for Indexation Proposal on Real Estate, Offers Options to Taxpayers

• The government has introduced an amendment allowing taxpayers to choose between the new 12.5% LTCG tax rate without indexation and the old 20% rate with indexation for property purchases made before July 23, 2024.
• This change comes after the Budget 2024 announcement to withdraw indexation benefits and lower the LTCG tax rate from 20% to 12.5%.
• Indexation adjusts the purchase price of an asset for inflation, reducing gains and tax liability, which was a concern for many property owners.
• The amendment is seen as a response to pushback from the ruling BJP's core support base, the middle class, and concerns about increasing black money in real estate transactions.
• Real estate stocks declined following the initial Budget decision, highlighting the sector's sensitivity to tax policy changes.

Source: Moneycontrol