Here’s how new capital gain proposal helps investors save tax

New Delhi, July 24 (SocialNews.XYZ) The proposal to remove indexation benefit in the long-term capital gain calculation in the Union Budget 2024-25 will ultimately be beneficial to investors, the Centre has said

As Finance Minister Nirmala Sitharaman’s proposal sparks debate, Revenue Secretary Sanjay Malhotra during a media interaction explained how it is beneficial to investors.

Malhotra said, "If a person had purchased a property for Rs 20 lakh in 2005 and that property is sold for Rs 2 crore today and if indexation is included, then the capital gain on it would be around Rs 1.40 crore. If a 20 per cent long-term capital gains tax is imposed on this, the tax would be around Rs 28 lakh. As per the new proposal, the total capital gain on this transaction will be around Rs 1.80 crore. Now long-term capital gains tax is imposed at 12.5 per cent, and a total tax of Rs 22.5 lakh will have to be paid."

He further said that the government has removed indexation, and long-term capital gain on the property has been reduced from 20 per cent to 12.5 per cent. Most people will benefit from this, he said.

The government has given big relief in personal income tax in the Budget that was presented in Parliament on Tuesday. The tax has been reduced to 10 per cent on income of up to Rs 10 lakh. The standard deduction has been increased to Rs 75,000, which was earlier Rs 50,000.

Source: IANS