- The Finance Bill 2024, passed in the Lok Sabha, includes an amendment that offers relief for real estate capital gains tax.
- Taxpayers can now choose between a new lower tax rate or the old regime with a higher rate and indexation benefits.
- Earlier, in the budget 2024-25 proposal to remove the indexation benefit for long-term capital gains (LTCG) on real estate, replacing the 20% tax rate with a 12.5% rate without indexation.
- Individuals or Hindu Undivided Families (HUFs) who bought houses before July 23, 2024, can now opt to pay LTCG tax at 12.5% without indexation or 20% with indexation.
- The Finance Bill was passed by voice vote with 45 official amendments.
- The Finance Minister defended the Budget, stating it aims to promote investment and benefit the middle class.
- Measures taken by government:
- Reduced customs duty to promote trade
- Tax exemption hike on long-term capital gains in listed equities and bonds to ₹1.25 lakh.
- Simplified taxation regime and eased compliance as 72% of taxpayers opted for the new regime
| Aspect | LTCG | STCG |
| Holding Period | >36 months for most assets >12 months for listed securities, equity-oriented mutual funds, and zero-coupon bonds | ≤36 months for most assets ≤12 months for listed securities, equity-oriented mutual funds, and zero-coupon bonds |
| Tax Rates | Equity-Oriented Investments: 10% (for gains >₹1.25 lakh without indexation) Other Assets: 20% with indexation or 12.5% without indexation for house property bought before 23 July 2024. | Equity-Oriented Investments: 15% Other Assets: Individual’s applicable income tax slab rate |
| Exemptions | Available under specific sections of the Income Tax Act (e.g., Section 54 for residential property reinvestment) | Generally, fewer exemptions are available compared to LTCG |
Dig Deeper: Can GST rate changes be made through the Finance Bill?
