Indexation Benefits Withdrawn on Capital Gains
The Indian government has withdrawn indexation benefits for capital gains made from property sales, leading to increased tax liabilities and potential underreporting of sale values.
Tue, 23 Jul 2024
The Indian government has withdrawn the indexation benefit on capital gains made from the sale of property. This change is likely to have a significant impact on taxpayers who sell their properties and face higher tax liabilities as a result.
For those unfamiliar with the concept, indexation helps reduce the capital gain by adjusting the purchase price for inflation. This means that if you bought a property for ₹10 lakh a decade ago and sold it for ₹30 lakh today, without indexation, your capital gain would be ₹20 lakh.
Indexation benefits on capital gains made from the sale of property have been withdrawn. What does that mean?
— THE SKIN DOCTOR (@theskindoctor13) July 23, 2024
If you bought a property for ₹10 lakh a decade ago and sold it for ₹30 lakh today, without indexation, your capital gain would be ₹20 lakh, and you would have to pay…
However, with indexation, the adjusted purchase price would be higher due to inflation, reducing the capital gain and subsequently the tax liability. The withdrawal of this benefit is likely to lead to increased tax liabilities for taxpayers who sell their properties.
As the government continues to make changes to taxation policies, it will be important to stay informed about these updates to ensure compliance with tax laws. The withdrawal of indexation benefits on capital gains is a significant change that taxpayers should be aware of and consider in their long-term financial planning.
Published by Chronicles Of India. Scroll down to read more
