Through the Union Budget, 2024 the Hon’ble Finance Minister Smt Nirmala Sitharaman had proposed that the real estate properties will now attract long term capital gains at a flat rate of 12.5%. This tax rate is however, without the indexation. This is to say that with the reduction in capital gains tax rate, the seller will not be able to claim the indexation benefits.
Simply put, there will be two options for property owners now while selling their properties and they can go for the one where they have lower tax liability:
1) Compute the tax on long-term capital gains on the sale of immovable property at 20% with indexation benefit.
2) Compute the tax on long-term capital gains on the sale of immovable property at 12.5% without indexation benefit.Â
