The Lok Sabha passed the Finance (No.2) Bill, 2024, with amendments on Wednesday. Among the changes, taxpayers can now calculate liability on the sale of land and buildings acquired before July 23, 2024, using the lower of the new and old Long-Term Capital Gains (LTCG) tax rates.
Finance Minister Nirmala Sitharaman remarked that the middle class has benefited from various tax proposals under the Narendra Modi government.
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She reiterated that the government has simplified the taxation regime and eased compliance without significantly increasing taxes.
The Finance Minister also announced a comprehensive review of the indirect tax rate structure over the next six months, aiming for a more simplified tax structure. The budgetary proposal on capital gains aims to treat all asset classes equally, ensuring no additional tax burden on real estate LTCG.
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The government has not removed the indexation benefit on LTCG tax but has retained the rollover provision if capital gains are invested in new properties. Furthermore, the exemption limit on long-term capital gains has been increased from Rs 1 lakh to Rs 1.25 lakh to benefit the middle class.
In her speech, Sitharaman noted that the effective tax on an annual income of Rs 15 lakh was reduced to 10 percent in 2023 and further lowered under the new income tax regime.
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The Vivad se Vishwas scheme will help resolve pending litigation and demands, benefiting the middle class and small businesses. Additionally, income tax refunds are now issued within days, compared to months previously. The average processing time for ITR has been reduced to 10 days in 2023-24, from 93 days in 2013-14.
Notably, 72.8 percent of individuals, totaling 5.25 crore taxpayers, have opted for the new income tax regime. Further, it was recounted by the finance minister that A total of 7,754 tax appeals will be withdrawn from various judicial fora due to the upward revision of the monetary limit for filing appeals.
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