.jpg?width=1200)
The central government, in the ongoing parliament session, brought about an amendment to allow taxpayers the option of availing of either a lower rate of 12.5 percent without indexation or a 20 percent rate with indexation. This, however, would be applicable to properties acquired before July 23, 2024.
This has resulted in positive responses from some corners, as some welcomed the move as a 'victory' for taxpayers. Meanwhile, many eagle-eyed observers have also chosen to read between the lines and claimed that this is only a partial relief.
Opposition MP from AAP, Raghav Chadha, while speaking in the Rajya Sabha, welcomed the move and said, "I am glad that the Hon’ble Finance Minister has restored Indexation benefit for Investors on Immovable Property. From the 23rd day of July 2024, the day the budget was presented, I have been unequivocally saying that the removal of Indexation would be the biggest blow to Indian investors."
He, however, signalled caution, as he deemed this to be a partial relief. He added, "However, the Govt has partially restored Indexation, not fully restored."
He even gave two suggestions and said, "Provide Indexation benefit on assets purchased even AFTER the 24th July, 2024".
He further went onto add, "Provide Indexation benefit on ALL Asset classes, not just on immovable property."
When we look at the first suggestion, it is in terms with difficulties that many buyers who may purchase assets post July, particularly in the later half of the year, when during festivities, many invest their resources to accrue assets. If this is extended beyond July 23, this could benefit those buyers.
When we look at the second suggestion, this is line with the government's budget announcements, wherein taxes on short-term capital gains, or STCG and long-term capital gains, or LTCG, were raised, in addition to the increase in STT. This had led to a great deal of discontent among many 'middle-class' taxpayers, many of them even claiming to be fiscally constricted.
Another X user espoused this and said, "Partial victory for taxpayers. Government provides option to tax payers to follow old method of indexation or not."
He further added," But this is applicable only for properties bought till July 23rd 2024, the day of budget. Beneficial to all existing owners of property. But not for those who are going to acquire properties from now on."
