The Finance Bill 2024 has extended the indexation benefit in Long-Term Capital Gain (LTCG) to properties bought before July 23 this year. Homeowners can now choose 12.5 per cent LTCG without indexation in the new tax regime or 20 per cent LTCG with indexation in the old regime. In her Budget speech last month, Union Finance Minister Nirmala Sitharaman proposed reducing the LTCG from 20 to 12.5 per cent and removing the indexation benefit from LTCG to simplify the tax rules. However, this decision has triggered a public debate over its implication. Some parliamentarians have voiced concerns about whether it will adversely impact ordinary citizens. So, what is Indexation? It allows the adjustment of the property’s purchase price with inflation that increases the asset’s final cost, while reducing the capital gain. Let’s unpack this in detail. Also Read: Senior Citizens’ Inflation Expectation Is Higher Than Overall, Shows RBI Survey; How It Affects Spending Decisions, Corpus?
Indexation Benefit Is Available For Properties Bought Before July 23, 2024: Learn How It Reduces Tax Liability On LTCG
The tax incidence of Long-Term Capital Gain (LTCG) depends on factors such as the property’s capital appreciation during the holding period and the acquisition cost of the asset.

Indexation Benefit on Long Term Capital Gain (LTCG) Photo: Indexation Benefit on Long Term Capital Gain (LTCG)
Indexation Benefit on Long Term Capital Gain (LTCG) Photo: Indexation Benefit on Long Term Capital Gain (LTCG)

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