The Union Budget 2024, announced on July 23, 2024, proposed a significant change in the long-term capital gains tax regime. The long-term capital gains tax rate is set to be reduced from 20% to 12.5%. However, this proposal included removal of the indexation benefit for long-term capital gains on the sale of assets, including real estate.
Initially, this removal of indexation benefit was to apply to properties acquired after 2001. In a relief to real estate owners, it has now been proposed to extend the option of availing indexation benefit to properties purchased until July 23, 2024.
Taxpayers selling property purchased before July 23, 2024 will have two options to compute their long term capital gains tax:
– Continue under the old tax regime : Pay a 20% long-term capital gains tax with the indexation benefit
– Opt for the new tax regime: Pay a lower tax rate of 12.5% without any indexation benefit
But what happens in case of a long term capital loss? Will the loss on account of indexation benefit be allowed to be carried forward? Let us know your thoughts in the comments below or reach out to us at priya.k@treelife.in for a detailed discussion.
Stay tuned for further insights on this!
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