Income tax - Provisions

  1. Capital Gains Tax on Sale of House Property vs. Land Criteria House Property (Building & Land) Vacant Land (Plot of Land) Holding Period for LTCG More than 24 months (Long-Term) More than 24 months (Long-Term) Holding Period for STCG ≤ 24 months (Short-Term) ≤ 24 months (Short-Term) STCG Tax Rate As per Slab Rate As per Slab Rate LTCG Tax Rate 20% with Indexation 20% with Indexation Indexation Benefit ✅ Available ✅ Available Exemptions Available Section 54 (Reinvestment in house) & Section 54EC (Bonds) Only Section 54F (Reinvestment in house) & Section 54EC (Bonds)   🔹 Key Difference in Exemptions House Property: Eligible for Section 54 , allowing reinvestment in another re...

  What did Budget 2024 propose in regard to removal of indexation benefits for properties? The Budget 2024 has proposed removing indexation benefits on capital gains from the sale of long-term capital assets. Previously, property owners adjusted their purchase prices for inflation, reducing taxable profits. The tax rate on long-term capital gains for both financial and non-financial assets has been reduced from 20% to 12.5%. However, the indexation benefit for the sale of long-term assets has been removed. As a result, any sale of long-term assets after July 23, 2024, will be taxed at 12.5% without the indexation benefit. Individuals can still use the fair market value (FMV) as the cost of acquisition for assets purchased on or before April 1, 2001, when selling these assets. The amendment to Finance Bill 2024 announced the restoration of indexation benefits on immovable property purchased before 23rd July 2024 for individuals and HUFs only for the purpose of computing tax. In othe...