New Delhi: Godrej Properties saw a significant increase in stock value on Wednesday morning trading due to government's proposal to offer relief to individuals who purchased homes before July 23, 2024, by providing two options for long-term capital gains (LTCG) tax rates.
Godrej Properties' shares rose by 4.12 pc, Macrotech Developers saw a 4 pc increase, DLF climbed by 3.88 pc, Oberoi Realty jumped by 3.79 pc, and Mahindra Lifespace Developers advanced by 1.82 pc on the BSE. During morning trading, the BSE realty index was up by 1.72 pc at 7,953.46. The 2024-25 Budget suggested reducing LTCG from 20 pc to 12.5 pc while eliminating indexation benefits. The updated rates became effective on July 23, 2024. Taxpayers were able to calculate profits from selling capital assets by considering inflation due to the indexation benefit.
Tax specialists had indicated that the planned revisions in the Budget would elevate the LTCG tax load. According to the changes in the Finance Bill 2024, which were sent to Lok Sabha members on Tuesday, people or Hindu Undivided Families who purchased homes prior to July 23, 2024, can calculate their taxes under both the new scheme (at 12.5 percent without indexation) and the old scheme (at 20 percent with indexation), and pay the lower of the two. Partner Gouri Puri of Shardul Amarchand Mangaldas & Co. stated that this will address taxpayer worries about forfeiting indexation benefits in exchange for a decreased long-term capital gains tax rate.
Taxpayers are allowed to opt for the regime that provides more advantages and should not suffer any negative consequences due to changes in the law. Concerns exist regarding the taxation of profits from inflation on real estate purchased before a legal change.
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