Taxpayers to get a choice – Whether to pay tax @20% with indexation or 12.50% with Indexation
Finallly, Indexation provision is proposed to be kept as it is in the Statute book for the puepose of Gtlranderfathering.
FM has proposed amendment in the Finance (No.2) Bill, 2024 and provides grandfathering protection to LTCG on Immovable Property acquired before 23.7.2024 and transferred on or after 23.7.2024 by resident individuals & HUFs by restricting their LTCG tax liability to the lower of the two options:
- 20% with indexation or
- 12.5% without indexation.
However, there is a rider. Long term capital loss, if any, arising due to indexation on such transfers on or after 23.7.2024, will get lapsed.
Now the provisions proposed can be summarised as under:
(1) LTCG on Immovable Property acquired before 23.7.2024 and transferred between 1.4 2024 and 22.7.2024 will be taxable @ 20% with indexation.
(2) LTCG on Immovable Property acquired before 23.7.2024 and transferred on or after 23.7.2024 will be taxable @ 20% with indexation or 12.5% without indexation, whichever is lower.
The steps is a welcome amendment as no indexation benefit was a matter of criticism across country.
However, instead of just referring incometax computed under item (B), in the amendment no. 20 proposed in the Bill today, the more fairer treatment would have been to cover item (A) also, such that all transfers of Immovable property on or after 1.4.2024 gets both the same options.
However, above grandfathering benefit has been proposed only in respect of transfers of Immovable properties by resident Indian individuals & HUFs, and not by corporates, firms & LLPs.
The copy of the order is as under:
List of Amendment to be moved by Finance Minister related to The Finance 02 Bill
