LTCG Tax In Real Estate

Starting from July 23, 2024, taxpayers will have new options for how they pay taxes on long-term capital gains from property and unlisted securities. If you sell property (like land or buildings) that you bought before this date, you can choose between two tax rates: 12.5% without adjusting for inflation or 20% with inflation adjustment. This means you can calculate your tax using both methods and choose the one that results in a lower amount.

Similarly, for unlisted securities (such as shares in private companies), you can pay 10% tax if you sell them before July 23, 2024, and 12.5% tax if sold after this date.

This change in tax rules follows feedback from taxpayers who were concerned about removing inflation adjustments from real estate taxes. The Finance Bill, 2024, updates these rules, reversing a previous plan to raise the tax rate on long-term capital gains from unlisted securities to 12.5%. Note that this new tax relief does not apply to listed stocks or mutual funds, which remain unaffected by these changes.