Section 54F permits investment of consideration in maximum two properties and not more.
The finance ministry is looking at rationalising long-term capital gains tax structure by bringing parity between similar asset classes and revising the base year for computing indexation benefit to make it more relevant, an official said on Friday. Currently, shares held for more than one year attract a 10 per cent tax on long-term capital gains. Gains arising from sale of immovable property and unlisted shares held for more than 2 years and debt instruments and jewellery held for over 3 years attract 20 per cent long term capital gains tax.
Jaitley said returns from the stock market are quite attracting and it was time to bring them under the ambit of capital gains tax.
An argument used for removal of this exemption is that it is used to launder black money and bring it in as clean tax paid money by manipulating the price of less liquid shares in the market, says Harsh Roongta.
Ask rediffGURU and tax expert Mihir Tanna your income tax-related questions.
'The estimates of tax forgone on this item run into hundreds of billions.' 'And there is neither fairness nor rationality to support continuing with this tax holiday for just one class of investors, those who put their money in shares,' says T N Ninan.
Jaitley assured that both the banking system and the government will make the resources available to them.
'There is a huge tax differential of 15% to 20% depending on income classification.'
The income tax department on Wednesday issued FAQs on changes in the capital gains tax saying the idea behind it was to simplify the tax structure and promote ease of compliance. The holding period for various asset classes for the purpose of short- and long-term capital gains tax has been rationalised. The holding period of all listed assets will be now one year for the purpose of long-term capital gains tax (LTCG).
'Expectations are high regarding the change in LTCG with respect to equity investments.'
Ask rediffGURU and tax expert Mihir Tanna your income tax-related questions.
Taxpayers seeking to save tax from the sale of gold (including inherited) should reinvest the capital gains in residential property to avail of the benefit provided by Section 54F.
The Budget emerges as a measured, credible and forward-looking policy document that reinforces India's commitment to remaining a stable, reform-oriented economy amid an increasingly fragmented global landscape, says A Balasubramanian.
The government on Wednesday imposed a limit of Rs 10 crore for deduction on long-term capital gain tax for reinvestment in residential properties under Section 54 and 54F of the Income Tax Act. These two sections deal with reinvestment of proceeds from sale of long-term assets (housing or other capital assets) to buy residential properties. "For better targeting of tax concessions and exemptions, I propose to cap deduction from capital gains on investment in residential houses under sections 54 and 54F to Rs 10 crore," Finance Minister Nirmala Sitharaman said in her Budget speech.
The Budget may tweak capital gains taxes levied on equity, debt and immovable property to bring parity in varied tax rates and holding period, a senior official said. Explaining the rationale, the official said there needs to have an alignment in tax rate and holding period for all the asset class. Changes in capital gain tax expected in Budget, the official said.
rediffGURU Mahesh Padmanabhan answers readers' personal income tax queries.
Transcript of the tax chat held on March 12.
rediffGURU T S Khurana answers readers' personal income tax queries.
rediffGURU T S Khurana answers readers' personal income tax queries.
Debt mutual funds are likely to be stripped of the long-term tax benefit if they invest less than 35 per cent of their assets in equities. Such mutual funds will attract short term capital gains tax. The government is likely to make such a proposal in the form of an amendment to the Finance Bill 2023 in the Parliament, sources said.
Ask rediffGURU and tax expert Mihir Tanna your income tax-related questions.
Among its 27 recommendations for the Union Budget is this: It has suggested that equity investments held for more than one year and up to three years should be taxed at 12.5 per cent on gains exceeding 2 lakh in a financial year.
Higher levy on dividends earned by individuals also on radar.
Is the parabolic rise in silver running out of steam or just getting started? Ramalingam Kalirajan offers his take on if you should invest in silver now?
The government is open to 'some tinkering' in the varied rates and holding period for computation of capital gains tax on shares, debt and immovable property, in a bid to make it simple, revenue secretary Tarun Bajaj said on Wednesday. Under the Income Tax Act, gains from sale of capital assets, both movable and immovable, are subject to 'capital gains tax'. The Act, however, excludes movable personal assets such as cars, apparels, furniture from this tax.
rediffGURU Samkit Maniar answers readers' personal income tax queries.
Platform-style partnerships between global investors and Indian developers are expected to gain further traction over the next few years. This comes as institutional capital increasingly shifts from one-off asset acquisitions to scalable, long-term strategies.
rediffGURU T S Khurana answers readers' personal income tax queries
'Genuine' share transfer gets relief; CBDT lists three scenarios where tax would be levied
'Volumes in F&O trading had gone up rapidly and, in a way, the increase in STT on F&O will protect investor interest.'
'Long-term investors seeking sustainable gains from resilient, fundamentally strong companies may go for these funds.'
Zero-coupon bonds suit investors with long-term goals such as retirement or education planning.
The Union Budget for 2026-27, presented by Finance Minister (FM) Nirmala Sitharaman on Sunday, which was a first, had an excellent domestic macro backdrop. According to the first advance estimates, gross domestic product (GDP) in constant prices is projected to grow 7.4 per cent in the current financial year, against 6.5 per cent in 2024-25.
Ask rediffGURU and tax expert Mihir Tanna your income tax-related questions.
Escalating geopolitical tensions in West Asia are prompting investors with exposure to Dubai's real estate market to reassess their portfolios. And, in this rejig, India is emerging as a stable destination for capital investment and long-term growth.
Sometimes, the most powerful Budgets whisper and the wisest investors listen, notes Ramalingam Kalirajan.
The regulations will only apply to the share purchases that have been done after October 1, 2004
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