Finance Minister Nirmala Sitharaman said that keeping in mind the voice of the people, she withdrew the capital gain tax rule related to property introduced in the budget. However, the purpose of the new rule introduced in the budget was not to increase revenue.
She said that we wanted to simplify the long term capital gain tax rule related to property. Still, people raised their voice on this and we showed courage to amend it.
Budget is helpful for the middle class: Sitharaman
During her reply to the Finance Bill 2024 in the Lok Sabha, Sitharaman said that her budget is going to provide employment along with relief to the middle class. While the opposition is making the assumption that this budget is against the middle class, which is wrong. She is going to bring many changes in the tax format in the next six months. After the reply of the Finance Minister, the Finance Bill 2024 was passed.
Also Read: RBI introduces delegated payments through UPI – Know everything
Under the revised rules related to property sale, the seller will have the option of both the old rules related to indexation along with the rules introduced in the budget to pay tax on long term capital gains on the sale of any property purchased before 23 July 2024. Out of the two, the seller will be able to choose the option under which he will have to pay less tax. Tax will have to be paid at the rate of 20 percent with indexation and 12.5 percent without indexation.
People choosing new tax regime
The Finance Minister said that if the gain from property sale of up to 10 crores is invested in property itself, even if two houses are bought with that amount, then no tax will be levied. The Finance Minister said that the old system is continuing along with the new system of income tax and taxpayers can invest for their savings under deduction. But among the ITRs filed this year, 72.8 percent of the people have chosen the new system.
People are investing a lot in mutual funds and for the last five years, 17.88 lakh new folios are being created every month for investing in mutual funds. The government has again introduced the Vivaad se Vishwas scheme to settle tax related disputes. Long term capital gains up to Rs 1.25 lakh per annum from the market have been made tax free. In such a situation, it is not right to call this budget against the middle class. Startups have been given relief by abolishing the angel tax introduced in 2012.
