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Informist, Wednesday, Aug 7, 2024

 

--Lok Sabha passes Finance Bill 2024

--Sitharaman:LTCG tax amendment ensures no extra burden on realty sale 
--Sitharaman: Gave options on LTCG tax on property sale to cut burden 
--Sitharaman:Low corporate tax vs income tax narrative not well-founded 
 

NEW DELHI – The Lok Sabha today passed the Finance Bill to approve the tax changes and amendments to legislation announced in the Budget for 2024-25 (Apr-Mar). However, the government introduced the bill in the Lower House after making an amendment to the initial announcement on long-term capital gains tax rate on income from the sale of real estate.

 

"In the case of the transfer of long-term capital asset--land or building or both--by an individual, which is acquired before Jul 23, 2024, the taxpayer can compute his taxes under the new scheme which is 12.5% without indexation, and the old scheme, 20% with indexation, and pay such tax which is the lower of the two," Finance Minister Nirmala Sitharaman said in the Lok Sabha.

 

In her Budget speech on Jul 23, Sitharaman had said the government would cut the tax rate on long-term capital gains from the sale of assets like land or buildings to 12.5% from 20% and remove the indexation benefit that adjusted for inflation.

 

As per the current amendment, a property seller who acquired the property between 2001 and Jul 23 can either opt for the 20% rate with the indexation benefit or 12.5% without the benefit, based on whichever regime lowers their tax liability. The government will levy 12.5% tax without indexation on long-term gains from the sale of properties bought after Jul 23. The government has retained the indexation benefit for taxpayers on properties bought or inherited before 2001.

 

Sitharaman also said the Opposition's charge that the Centre had imposed a heavier tax burden on the middle class with high income tax, compared to a lighter burden on the rich with lower corporate tax, was not well-founded. During the discussion on the Finance Bill on Tuesday, the Opposition parties had turned the heat on the government over the rising share of income tax and falling share of corporate tax in total tax collection.

 

Of the gross tax revenue of 34.648 trln rupees in 2023-24, the government collected 10.109 trln rupees from income tax against 9.111 trln rupees from corporate tax.

 

With the passage of the Finance Bill, the Lok Sabha has effectively passed the Budget for the current year. On Monday, the house passed the Demands for Grants of various ministries for the year, and the Appropriation Bill to allow the government to withdraw money from the Consolidated Fund of India.

 

Now the Rajya Sabha will hold discussion on the bills and send them back to the Lok Sabha with or without any recommendation for changes. As both are money bills, the Rajya Sabha does not have the power to approve or reject them.  End

 

Reported by Krity Ambey

Edited by Rajeev Pai

 

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