Source- This post on Finance Bill 2024 has been created based on the article “Lok Sabha passes Finance Bill, amends provision on LTCG tax” published in “The Hindu” on 8 August 2024.
Why in News?
The Finance Bill, 2024, was passed in the Lok Sabha with an amendment relaxing the long-term capital gains (LTCG) tax proposal on real estate. The amendment allows taxpayers to choose between a new lower tax rate or the old regime with an indexation benefit.
About the Amendment:
1. Individuals or Hindu Undivided Families (HUFs) who bought houses before July 23, 2024, can opt for:
i) Paying LTCG tax under the new scheme at 12.5% without indexation,
or
ii) Claiming the indexation benefit and paying 20% tax.
Other Measures taken to aid the Middle class in the Finance Bill 2024
i) Reduction in customs duty on various goods to promote trade, investment, and employment.
ii) Increase in the tax exemption limit on LTCG in listed equities and bonds from ₹1 lakh to ₹1.25 lakh.
iii) Simplification of tax governance and reduction in tax slabs in 2023 and this year.
iv) Increase in the standard deduction for the salaried class.
About LTCG Tax
1. Long-Term Capital Gains (LTCG) tax is a tax levied on the profits earned from the sale of certain assets held for a specified period, which is considered long-term.
2. The nature and rate of LTCG tax vary depending on the type of asset and the jurisdiction in which the asset is located or sold.
3. The definition of long-term assets varies based on the type of asset:
i) Equity Shares/Mutual Funds: Assets held for more than 12 months.
ii) Immovable Property (e.g., land, buildings): Assets held for more than 24 months.
iii) Other Assets: Generally, assets held for more than 36 months.
UPSC Syllabus: Indian economy
Discover more from Free UPSC IAS Preparation Syllabus and Materials For Aspirants
Subscribe to get the latest posts sent to your email.
