Relief for homeowners in long term capital gain tax regime

In a major relief to home buyers, the government on Tuesday proposed an amendment to the long-term capital gains (LTCG) regime, which will allow taxpayers to choose between a lower tax rate of 12.5 per cent without indexation or a higher rate of 20 per cent with indexation for properties acquired before July 23, 2024.

As per the proposed amendment, taxpayers who sold assets such as land or buildings before July 23 have the option to choose between the new and old tax regimes, allowing them to select the one that offers a lower tax liability. The new LTCG regime offers a 12.5 percent tax rate without indexation benefits, while the old slab imposes a 20 per cent tax rate but allows for indexation benefits.