Lok Sabha passes Finance Bill with amended LTCG tax provision on immovable properties amid criticism
The amendment allows taxpayers to switch to a new lower tax rate or stay with the old regime that had a higher rate with an indexation benefit.
The Lok Sabha on Wednesday passed the 2024 Finance Bill after the Centre amended it to relax the increase in the long-term capital gains tax on immovable properties that was introduced in the Union Budget, PTI reported.
The amendment allows taxpayers to switch to a new lower tax rate or stay with the old regime that had a higher rate with an indexation benefit.
This indexation allows taxpayers to adjust the purchase price for inflation, which reduces tax liability on gains from investments such as debt funds.
In her Budget, Union Finance Minister Nirmala Sitharaman had proposed to increase the long-term capital gains tax from 10% to 12.5% but without the indexation benefit.
This increase was criticised for raising tax burden and disincentivising investments in the housing market.
On Wednesday, Sitharaman moved an amendment to the Finance Bill to give an option to taxpayers. The bill was then approved in the Lower House by voice vote.
It will now be tabled in the Rajya Sabha for discussion. However, the Upper House does not have the power to reject a money bill.
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