Finance Minister Nirmala Sitharaman’s New Tax Rules to Help Real Estate Buyers
Finance Minister Nirmala Sitharaman has proposed an amendment to the Finance Bill that offers significant relief on capital gains tax for property transactions. This change is expected to drive investment and boost sales across all housing segments.
Key Details of the Amendment
The amendment allows taxpayers to choose between two tax options for properties acquired before July 23, 2024:
- 12.5% tax without indexation
- 20% tax with indexation
This flexibility aims to reduce the tax burden on property transactions, encouraging more investments in the real estate sector.
Industry Leaders’ Reactions
Niranjan Hiranandani, Chairman of Hiranandani Group and NAREDCO, praised the amendment, stating, “By enabling taxpayers to choose the lower tax burden between the new and old schemes, the amendment is poised to drive investment and enhance sales across housing segments.”
Ritesh Mehta, Senior Director/Head of Residential Services at JLL India, also welcomed the move, noting that it will provide relief to middle-class buyers and maintain the positive sentiment in the real estate market.
Additional Benefits
The proposed amendment will also apply to unlisted equity transactions done before July 23, 2024, which will be taxed at 10% long-term capital gains instead of the previously proposed 12.5% tax.
This forward-thinking approach by the Finance Minister is expected to bring more liquidity and optimism to the real estate sector.
Doubts Revealed
Finance Minister -: The Finance Minister is a person in the government who is responsible for managing the country’s money, including taxes and spending. In India, this person is Nirmala Sitharaman.
Nirmala Sitharaman -: Nirmala Sitharaman is a politician in India who is currently the Finance Minister. She makes important decisions about how the country’s money is used.
Tax Rules -: Tax rules are guidelines set by the government on how much money people and businesses need to pay to the government from their earnings or transactions.
Real Estate Buyers -: Real estate buyers are people who purchase property, like houses or land. These new tax rules are meant to help them save money.
Amendment -: An amendment is a change or addition to a law. In this case, it means changing the Finance Bill to make new tax rules.
Finance Bill -: The Finance Bill is a proposal made by the government that includes all the changes in taxes and spending for the year. It needs to be approved by the parliament.
Capital Gains Tax -: Capital gains tax is a tax you pay when you sell something valuable, like a house, for more money than you bought it for. The new rules change how much tax you pay on these gains.
Indexation -: Indexation is a way to adjust the purchase price of an asset for inflation, which can reduce the amount of tax you have to pay when you sell it.
Niranjan Hiranandani -: Niranjan Hiranandani is a well-known businessman in India who works in the real estate sector. He builds and sells properties.
Ritesh Mehta -: Ritesh Mehta is another important person in the real estate industry in India. He also supports the new tax rules.
Middle-class buyers -: Middle-class buyers are people who have an average amount of money to spend. These new tax rules are especially helpful for them when buying property.
