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India’s budget has been presented and once again the discussions among the middle class have come to a halt on tax. Meanwhile, Union Finance Minister Nirmala Sitharaman has clarified how the government calculates tax. She says that tax is not decided after calculation in the air. The government has announced some changes in the rates in the new regime of income tax.
In a recent interview to CNBC-TV18, Sitharaman said, ‘Taxes have not been increased just because I want more money… This decision is based on the idea that every asset class should be treated equally.’ She has described this budget as better for the future. Sitharaman presented the country’s budget for the 7th consecutive time on Tuesday.
Sitharaman in her budget speech on Tuesday announced a reduction in the tax rate on long-term capital gains in case of immovable properties from 20 percent to 12.5 percent. However, with this, ‘indexation benefit’ (assessment of the impact of inflation on the investment value) has been removed. In such a situation, now it is feared that a person selling his property will have to pay more capital gains tax.
In this regard, the Revenue Secretary tried to clarify the situation in an interview given to PTI-Bhasha. He said, “This is largely an initiative to simplify things. Some people have expressed apprehension over the removal of indexation. I want to address their concerns.” Malhotra said, “With the removal of the indexation provision, the capital gains tax rates have been reduced from 20 percent to 12.5 percent. This will benefit most people investing in real estate in the long term because the rate of profit on this investment is more than 10-11 percent.”
He said that investors will also get rollover benefits in this. He said, ‘If you are investing the money received from the sale of the property to buy a house again, then there will be no tax on capital gains up to Rs 1 crore.’
(With agency input)
