Yes. They could amend it for senior citizens. Over 40 yrs of working life my friend bought three properties, and due to old age 65 + finds it difficult now to have them maintained, rented out, repaired, pay property tax and so on and wanted to sell them and put in MF or FD etc . Now he's screwed it seems.
No they won't. Under Section 54 of the Income tax act, the individual/HUF can save their taxes by reinvesting the capital gains in a single residential property. The new house must have purchased one year before the sale of the previous house or two years after the sale. When the taxpayer intends to construct a house, he has to build it within three years. As per Section 54EC of the IT Act, all taxpayers can avail tax benefit on the capital gains from the sale of residential property by investing bonds. Taxpayers need to invest in these bonds within six months of the transfer date of the land, or before the due date of filing the tax return for the relevant financial year. The maximum amount that the taxpayer can invest is Rs 50 lakh.
@@Fondyacho while selling old houses, maximum component of the sale proceeds is capital gains. So a large component of the sale proceeds have to be reinvested to save taxes, which defeats the purpose stated above, where, the senior citizens are trying to monetize old assets so that they can take care of their daily financial needs in their old age. I know that 2001 has been stated as cut off for grandfathering, but that doesnt help because the realestate prices started really increasing in second half of 2000. When the Government doesnt provide any kind of help to Senior Citizens like social security, removing benefits like indexation is not justified. Simplification (As madam FM says) of Incometax Act cant be at the expense of tax payers. Relative to the population of India the tax payer percentage is very low (around 6.5%), the Goverment cant be exploiting the tax payers endlessly.
@@lchebium I am not defending the govt it's a mindless and idiotic decision but the comment stated a case of a old person selling the house and moving to a remote location it's a suggestion for tax saving.
This is a clear case of retrospective taxation. A more civilised way would have been to implement it for properties bought after the budget date and give an option to choose indexation or the new method, for properties bought before the budget date.
Currently, there are very few genuine home buyers due to stagnant income as well as unemployment. Majority of the builders are launching luxurious projects. Most of the buyers are investors (short term or long terms). This decision to remove indexation may result in cancellation of the previously booked properties as well as fall in new bookings. This may further aggravate the problems cash flow faced by many builders. The construction industry may witness a fall thereby affecting all other allied industries.
@@Vikramhdeshmukh A major factor that we produce expensive goods and aren’t export competitive is insanely high real estate prices. Builders naturally have profit motive and prefer doing least work and making maximum profits by selling luxury property. Small builders have been largely out of business courtesy RERA. Cartels have staying power and normal Indians, already taxed heavily, can’t afford. Result, neither industry grows or economy nor as a nation we are exports competitive. Policy initiatives that wipe out real estate cartels are needed even at the cost of builders cash flows. Section 54 and indexation etc. all must go for this. Creative destruction is essentially needed in this country. This is my considered opinion although I too stand to lose heavily on taxes if it’s implemented.
Indexation would largely impact legacy properties. What you fail to understand is that there are a lot of aspirational buyers and also people for whom owning a home gives a sense of security. Not everybody is an investor, with incomes rising a lot of people are also upgrading their lifestyles. There are a lot of individuals who are moving back to India and they are also buying these properties. Individuals who have benefitted from the upside in the equity market are also diversifying their portfolio's and investing in real estate. Price increase is a cyclical trend, in the last decade pre-pandemic era the demand was sluggish and prices were almost stagnant for the larger part of the decade. Consider factors such as amount of bribery, taxation, land acquisition cost, cost of raising funds and then inflation, do you still think apartments can be sold within a price of 6000-8000/sqft? With the digital age a lot has changed in the offering by builders, I can say that about developers who are based out of Bengaluru. Nobody would cancel recently booked apartments as the new schemes would only encourage more people to invest in real estate. A lot of people end up paying almost no taxes due to indexation.
The government did not consider people downsizing to obtain funds to live on. Such people include retirees, and those who have lost their jobs at an age when it is difficult to get an alternative job. I had a neighbour who was retired and did not want support from his children. When his income from savings lost value due to inflation, he sold his flat purchased over 30 years ago in Mumbai, bought a small flat in a retirement community in Coimbatore, and invested the balance in bank deposits for added income to combat the impact of inflation. These are the sort of citizens that will be hurt the most.
Not sure how many of us have seen the flipside. The people who can afford to "hold on" to the properties who otherwise would have sold them for a benefit will continue to hold on to their properties fearing no indexation benefit. That cuts off a good portion of the supply. Also, if the prices are kept relatively stable, the high income individuals will continue to buy more and more properties as their affordability levels are same or even higher. I am no expert, but indexation removal has just called in for an instability disaster.
As per Section 54EC of the Act, all taxpayers can avail tax benefit on the capital gains from the sale of residential property by investing in bonds. Taxpayers need to invest in these bonds within six months of the transfer date of the land, or before the due date of filing the tax return for the relevant financial year. The maximum amount that the taxpayer can invest is Rs 50 lakh.
@@Fondyacho Those who can afford to hold don't care about the paltry 4% returns offered by these bonds. Would rather hold on. Strong anti-squatter laws would have eased up the supply way more than this.
I disagree with you. Here it punishes people who made a loss and reduces taxes for people who made windfall gains. That's what I understood from all the debate happening around. Now a middle-class person who will have to sell an apartment for a personal emergency might not find a buyer who will pay him a premium. So he will end up losing value as well as pay LTCG which is like applying salt to the wound. This makes real estate furthermore illiquid assets. Real estate companies will struggle to sell apartments, and will eventually increase rents.
An uneducated , incompetent man was given 3 successive chances but this is how gives back by unleashing tax terrorism on its people. He is there to serve only a handful of Gujarati businessmen.
You got it wrong wrong wrong wrong wrong this time !!!! It has nothing to do with speculation . show me falling prices in long run . This is not the way to normalise housing market . This is same as demonitisation if i hold your theory that this is to punish speculators. Its like punishing 99 percent ppl to pretend to catch 1 percent standing in front of you . If at all this was the thought of GOvt why are u saying this why not Nirmala saying it ? you know why ? because that was not the objective at all.
Totally disagree with your final inference. There's more than enough inventory and cities are growing larger, people are moving back to villages for fresher environments. Governments are developing new satellite townships & it's been happening for 25 years. The business and housing must go hand in hand. Increasing capital gains is one of the many ploys, I don't feel it's Amrit Kaal. It's kaal sarp - engulfing everyone's patience and wealth.
Thanks Sucheta Dalal.. a contrarian view not many have chosen to look at. A perception most carry is that removal of indexation is bad. Sometimes perception is stronger than the truth.
6:38 "Sale price is adjusted" or "Purchase price is adjusted" ? 6:44 How does the sale price comes down? The capital gains will come down, not the sale price.
Black money transactions / content will boom. What about those people who will makes distress sales to pay mounting debts? It will affect them seriously...
One thing you are positive on...after long time... But real estate purchases aee often done way above the govt prices amd in premium which cannot be traced within present situations. And hence flow of black money... Other market related investments are mostly white in nature Apart from gold, which is not traceable. As of now with import duties on gold reduced... It may sore but. Those who are into real estate investments for the sack of living by just fllipping may not invest in gold as it not offer any premium on official prices like a peace of land. Please look into this perspective also. And try to share an opinion. Thank you
Govt knows that days of extremely high returns on real estate are over and they will undergo much slower gains over time which, with indexation rule on would have resulted in zero tax collections. Making the taxation flat means govt makes money in low price appreciation market env also. In terms of who loses: People who treat real estate as a source of value, i.e. investors.
In Prabhadevi, most of the appreciation would have occurred in the 1995-2005 period. Had he taken 2001 price, CAGR would have been different I believe.
we should indexation, we should end special rates, we should remove special exemptions like farm in come, we should tax everything based on slabs.. and the slab limits should get enhanced..
I would appreciate an answer to this question... The loss that would happen due to the elimination of indexation how would it be recovered by property developers, existing property owners and leasing companies?
The speculative buying and selling of properties should reduce. The real property owners who buy to stay or add value over the petiod of time will not crib about removal of indexation. In a budget excercisr, you can not keep everyone happy.
What happens to house owners (not investors) bought after 2001 want to sell their house to meet some personal urgencies as for most of working class in India, house is a genuine property which can support the family in those circumstances
Dear Sucheta: U were terrific in TOI 40 years ago. U R terrific now. Tell me something. How do U look so young? Despite the passage of decades. Cheers! Arvind Kala
Well back to old ways. Cash is king. Seller adds 10% to price in name of tax, then offers buyer 12.5% percent Discount on cash component. Seller saves tax on cash component. Both are happy. And just like that Black money is back.
Of the few times I tend to agree with you, this is one of them. Though, at personal level I end up paying higher tax if I sell my property today. Because, it a good policy aimed at reducing home prices and stabilising housing market in the long run.
Local are tax more then NIR and foreign investors. How and why different between two class. Farmers are free from tax on selling land .why ? Transfer within family is different
Thanks, cleared many doubts. However as you rightly pointed out at the beginning, the suddenness of change is not good for a democracy and government cannot piss off voters without facing consequences asthe recent election results show, so madam FM should be careful in future,
If real estate gives you a 2% CAGR, why do all the financial gurus from outside India say that real estate is a core investment to become a millionaire? Is it because interest rates outside India are very low, or is it due to the refinancing process? Do we have a refinancing process in India, and is it helpful?
This is signal to rich to start buying real estate and that stock market may crash in 1 year, so sell and buy real estate. Common man will be away from buying now and then after things are managed, next year budget, indexation will come back and possibly the capital gains also will reduce. Uniformity is good to serve different purpose but that means providing indexation to equity not vice versa and also not increasing tax on common man and let him choose whichever makes less tax indexation or direct tax. Also allow saving back in same asset in 1 year or 2 years to make it nill tax like 54A. That way people will be relaxed..
I'm surprised at your conclusion. Value of money at any point of time is real. Indexation is fair as it is based on inflation. It's ridiculous to argue government has a right to tax people even on basis of its own inefficiency to manage inflation. What nonsense are you saying. Besides every investor has taken his personal risk about the property and expended his resource in maintaining it. The goverment and civic agencies have merely profited from collecting taxes on it. Your argument would be logical if the government pays back compensation in case of a loss in the transaction. Instead the government introduced circle rates which are not always realistic but which ensures profitable taxation
Excellent talk , covering many aspects of real estate and indexation. This includes shock therapy govt in last decade. I concur the views on reality and aspirations , but in long run run it may be a blessing to all.
Such an elaborate background building in the talk that makes assumptions after assumptions without producing any supportive data. The ordinary citizens are going to be affected by this, this is not just for those who transact in real estate frequently, rather those will be less affected, because not holding a property for long will mean indexation doesn't matter.
It simply means the government does not have enough funds to take care of budget expenses and Interest payment. Outstanding debt of the government of India is over 160 lakh crore.
RE bubbles are big reason for crashes in any economy, remember Japan, US and recently China.... deflating this bubble in RE is welcomed before it became a problem for India and common people. Support FM. No other investment is given this privilege of indexation except RE. Thanks FM.
On one hand government is providing free houses to squatters/poor citizens and on the other hand middle classes are squeezed by high housing costs accompanied by highest taxes, stamp duties, registration costs, etc which make owning and maintaining a home a dream. Add to that parking charges, club house/swimming pool (which we hardly use) security personnel wages, housekeeping costs, lifts maintenance, compound/staircase electric bills make living in a city hell besides traffic/commuting woes. 14:29
To understand the overall impact of removal of indexation benefit in real estate transactions, will take time. It is too early to predict anything meaningful.
As we are all aware that there are relatively very few income tax payers. Removal of indexation will increase the cash dealings to avoid tax. So your explanation while it may sound logical but the so called wealthy investors will avoid tax by increasing the cash dealings. Already the stamp duty is very high. The FM should have tappered it down instead of a single blow by using grandfathering method
One class of citizens who make huge money without paying taxes parking the same in real estate with artificially lower stamp value at the time of sale to launder money will be most hit.
It is very illogical to remove logical indexation in a country like India having too much inflation in the economy lacking a stability... Ofcourse, others may have other views....
Much ado about nothing, indexation has not been eliminated but instead 2nd option has been provided at reduced tax rate of 12.5% LTCG tax, permitting people to choose old tax regime or new one which ever beneficial.
Cash component is going to sky rocket .. for many who think cash had gone out after demonetisation.. wake up. Cash money was always there and now it is going to just go through the roof ...
Many of us support the good work of the govt. But Nirmala Sithraman will go down in history as the most cruel finanace minister who had obstinately worked at killing middle class finances. Look at her - the.first finance minister to take away EEE status for EPF above one crore. The first finance minister who did not provide any substantial relief to middle class during 7 years even as basic inflation ( not denominated by managed CPI basket) makes people poorer. Even no relief for economically less well off. She is first to silently kill section 80C of exemptions by bringing new tax. Now she is killing old tax regime by providing exemptions only on new regime. LTCG, indexation, non rationalization of GST - list goes on. Definitely she does not have my vote and infact she does not have courage to fight an election. There should be constitutional amendment that PM and CCEA , CCS members should be only from Lok Sabha.
This lady has totally lost it! Property is the only asset way middle class or below rely on to amass some quick money for emergencies like big health treatment, kids marriage , even to build a house I have seen people sell some property and build the house..
Senior citizens moving from bigger house to smaller house or to remote location due to cash crunch are likely to suffer higher LTCG.
Yes. They could amend it for senior citizens. Over 40 yrs of working life my friend bought three properties, and due to old age 65 + finds it difficult now to have them maintained, rented out, repaired, pay property tax and so on and wanted to sell them and put in MF or FD etc . Now he's screwed it seems.
He can use Infrastructure bonds to save tax.. it gives 4-5% returns
No they won't.
Under Section 54 of the Income tax act, the individual/HUF can save their taxes by reinvesting the capital gains in a single residential property. The new house must have purchased one year before the sale of the previous house or two years after the sale. When the taxpayer intends to construct a house, he has to build it within three years.
As per Section 54EC of the IT Act, all taxpayers can avail tax benefit on the capital gains from the sale of residential property by investing bonds. Taxpayers need to invest in these bonds within six months of the transfer date of the land, or before the due date of filing the tax return for the relevant financial year. The maximum amount that the taxpayer can invest is Rs 50 lakh.
@@Fondyacho while selling old houses, maximum component of the sale proceeds is capital gains. So a large component of the sale proceeds have to be reinvested to save taxes, which defeats the purpose stated above, where, the senior citizens are trying to monetize old assets so that they can take care of their daily financial needs in their old age. I know that 2001 has been stated as cut off for grandfathering, but that doesnt help because the realestate prices started really increasing in second half of 2000. When the Government doesnt provide any kind of help to Senior Citizens like social security, removing benefits like indexation is not justified. Simplification (As madam FM says) of Incometax Act cant be at the expense of tax payers. Relative to the population of India the tax payer percentage is very low (around 6.5%), the Goverment cant be exploiting the tax payers endlessly.
@@lchebium I am not defending the govt it's a mindless and idiotic decision but the comment stated a case of a old person selling the house and moving to a remote location it's a suggestion for tax saving.
The screw up is, that there will be an increase in the cash component while buying houses. Its going back to the old times - literally.
This is a clear case of retrospective taxation. A more civilised way would have been to implement it for properties bought after the budget date and give an option to choose indexation or the new method, for properties bought before the budget date.
Sahi pakde hai
Real estate is a dead asset now. The growth be close to indexation. If there is indexation benefit , govt won't get any tax hence they played smart
Foolish decision by FM. Not giving a date of start of the scheme
Yeah, that's what I am wondering.
Date is effective same day as announcement 😢😢!!!
Introduced only with prospective effect ie, on properties purchased after 23 July 2024; this would have been a sensible step.
If I purchase a property in Jan 24 and sell in Jan 34 will indexation apply? Has gov given proper guidance on dates?
I see , you still have soft Conner for FM, otherwise you would have used word "thievery" instead of "foolish" ....
Currently, there are very few genuine home buyers due to stagnant income as well as unemployment. Majority of the builders are launching luxurious projects. Most of the buyers are investors (short term or long terms). This decision to remove indexation may result in cancellation of the previously booked properties as well as fall in new bookings. This may further aggravate the problems cash flow faced by many builders. The construction industry may witness a fall thereby affecting all other allied industries.
Great a short term correction is always great to show the real value of market
@@Vikramhdeshmukh A major factor that we produce expensive goods and aren’t export competitive is insanely high real estate prices. Builders naturally have profit motive and prefer doing least work and making maximum profits by selling luxury property. Small builders have been largely out of business courtesy RERA. Cartels have staying power and normal Indians, already taxed heavily, can’t afford. Result, neither industry grows or economy nor as a nation we are exports competitive. Policy initiatives that wipe out real estate cartels are needed even at the cost of builders cash flows. Section 54 and indexation etc. all must go for this. Creative destruction is essentially needed in this country. This is my considered opinion although I too stand to lose heavily on taxes if it’s implemented.
Indexation would largely impact legacy properties. What you fail to understand is that there are a lot of aspirational buyers and also people for whom owning a home gives a sense of security. Not everybody is an investor, with incomes rising a lot of people are also upgrading their lifestyles. There are a lot of individuals who are moving back to India and they are also buying these properties. Individuals who have benefitted from the upside in the equity market are also diversifying their portfolio's and investing in real estate. Price increase is a cyclical trend, in the last decade pre-pandemic era the demand was sluggish and prices were almost stagnant for the larger part of the decade. Consider factors such as amount of bribery, taxation, land acquisition cost, cost of raising funds and then inflation, do you still think apartments can be sold within a price of 6000-8000/sqft? With the digital age a lot has changed in the offering by builders, I can say that about developers who are based out of Bengaluru. Nobody would cancel recently booked apartments as the new schemes would only encourage more people to invest in real estate. A lot of people end up paying almost no taxes due to indexation.
The government did not consider people downsizing to obtain funds to live on. Such people include retirees, and those who have lost their jobs at an age when it is difficult to get an alternative job.
I had a neighbour who was retired and did not want support from his children. When his income from savings lost value due to inflation, he sold his flat purchased over 30 years ago in Mumbai, bought a small flat in a retirement community in Coimbatore, and invested the balance in bank deposits for added income to combat the impact of inflation.
These are the sort of citizens that will be hurt the most.
Bonds that save tax are available
In a country with 150cr population Property can't be for investment it's for living
If purchased 30 years ago, the indexation still applies. Do not spread panic with half knowledge
Govt could have a standard indexed cost of asset as on 23/7/2024 …it would have liked by all
better was to use FMV on Jan 1 2014 as buying price.. same applied to pre 2001(1/4/2001) properties already..
Not sure how many of us have seen the flipside. The people who can afford to "hold on" to the properties who otherwise would have sold them for a benefit will continue to hold on to their properties fearing no indexation benefit. That cuts off a good portion of the supply. Also, if the prices are kept relatively stable, the high income individuals will continue to buy more and more properties as their affordability levels are same or even higher. I am no expert, but indexation removal has just called in for an instability disaster.
They won't even invest in the real estate market now it's not at all profitable if we compare it with average inflation of last 10 years which is 4.5%
As per Section 54EC of the Act, all taxpayers can avail tax benefit on the capital gains from the sale of residential property by investing in bonds. Taxpayers need to invest in these bonds within six months of the transfer date of the land, or before the due date of filing the tax return for the relevant financial year.
The maximum amount that the taxpayer can invest is Rs 50 lakh.
@@Fondyacho Those who can afford to hold don't care about the paltry 4% returns offered by these bonds. Would rather hold on. Strong anti-squatter laws would have eased up the supply way more than this.
@@n4hp4r most keep them for rental yeild I don't think the Rental yeild is 4%. Capital application is an issue though.
I disagree with you. Here it punishes people who made a loss and reduces taxes for people who made windfall gains. That's what I understood from all the debate happening around.
Now a middle-class person who will have to sell an apartment for a personal emergency might not find a buyer who will pay him a premium. So he will end up losing value as well as pay LTCG which is like applying salt to the wound. This makes real estate furthermore illiquid assets.
Real estate companies will struggle to sell apartments, and will eventually increase rents.
An uneducated , incompetent man was given 3 successive chances but this is how gives back by unleashing tax terrorism on its people. He is there to serve only a handful of Gujarati businessmen.
@puttajunjaiah
Fully concur!!
We have the the most unfit people governing this country after a rigged election.
Anger is not just because if indexation. It is because more and more money to distribute it for the corrupt.
real estate dynamics are different in each city, state and region
You got it wrong wrong wrong wrong wrong this time !!!! It has nothing to do with speculation . show me falling prices in long run . This is not the way to normalise housing market . This is same as demonitisation if i hold your theory that this is to punish speculators. Its like punishing 99 percent ppl to pretend to catch 1 percent standing in front of you . If at all this was the thought of GOvt why are u saying this why not Nirmala saying it ? you know why ? because that was not the objective at all.
Already the bookings are cancelled in a huge number
Why is the whole country is not revolting against the increase in capital gains tax?
I don't think the whole country has enough money to invest in assets to be able to reap LTCG. Welcome to the world of wealth inequality.
Many have written it off as a price of staying in India.
Most 80 crs people are on freebies 😂
Totally disagree with your final inference. There's more than enough inventory and cities are growing larger, people are moving back to villages for fresher environments. Governments are developing new satellite townships & it's been happening for 25 years. The business and housing must go hand in hand. Increasing capital gains is one of the many ploys, I don't feel it's Amrit Kaal. It's kaal sarp - engulfing everyone's patience and wealth.
Thanks.
Introductory six minutes could have been shorter crisper. There is time cost to the wachers too.
Thank you for your thoughtful feedback! Your support means a lot to us! ..
come on, a few mins more in this mess wont cost much - there are multiple views and opinions on this . even accountants are trying to figure this out
Thanks Sucheta Dalal.. a contrarian view not many have chosen to look at. A perception most carry is that removal of indexation is bad. Sometimes perception is stronger than the truth.
6:38 "Sale price is adjusted" or "Purchase price is adjusted" ?
6:44 How does the sale price comes down? The capital gains will come down, not the sale price.
I think she meant the difference
I think she meant purchasing price.
In subsequent sentences, it is clarified that sale price minus adjusted cost of acquisition by multiplying with inflation index index
Black money transactions / content will boom. What about those people who will makes distress sales to pay mounting debts? It will affect them seriously...
One thing you are positive on...after long time...
But real estate purchases aee often done way above the govt prices amd in premium which cannot be traced within present situations. And hence flow of black money... Other market related investments are mostly white in nature Apart from gold, which is not traceable. As of now with import duties on gold reduced... It may sore but. Those who are into real estate investments for the sack of living by just fllipping may not invest in gold as it not offer any premium on official prices like a peace of land.
Please look into this perspective also. And try to share an opinion. Thank you
Govt knows that days of extremely high returns on real estate are over and they will undergo much slower gains over time which, with indexation rule on would have resulted in zero tax collections. Making the taxation flat means govt makes money in low price appreciation market env also.
In terms of who loses: People who treat real estate as a source of value, i.e. investors.
In Prabhadevi, most of the appreciation would have occurred in the 1995-2005 period. Had he taken 2001 price, CAGR would have been different I believe.
we should indexation, we should end special rates, we should remove special exemptions like farm in come, we should tax everything based on slabs.. and the slab limits should get enhanced..
So removing indexation is govt discouraging speculation in real estate market.So real estate industry is screwed.Thank you Sitharaman ma'am.
I would appreciate an answer to this question... The loss that would happen due to the elimination of indexation how would it be recovered by property developers, existing property owners and leasing companies?
The speculative buying and selling of properties should reduce. The real property owners who buy to stay or add value over the petiod of time will not crib about removal of indexation. In a budget excercisr, you can not keep everyone happy.
Excellent Explanation Suchitraji.
Good to see your video after a great trip from Bali.😊
Appreciate your kind words. Hope you would help in spreading the word about our channel and encourage others to subscribe as well!
Finance ministry should take action on corrupt income tax officials
What happens to house owners (not investors) bought after 2001 want to sell their house to meet some personal urgencies as for most of working class in India, house is a genuine property which can support the family in those circumstances
Acute, sharp and strongly worded!
Can't have different strokes for different folks..
Appreciate your kind words.
Dear Sucheta: U were terrific in TOI 40 years ago.
U R terrific now. Tell me something.
How do U look so young? Despite the passage of decades. Cheers!
Arvind Kala
Thank you for giving a bit of clarity to us lay people.
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Well back to old ways. Cash is king.
Seller adds 10% to price in name of tax, then offers buyer 12.5% percent Discount on cash component. Seller saves tax on cash component. Both are happy. And just like that Black money is back.
Of the few times I tend to agree with you, this is one of them. Though, at personal level I end up paying higher tax if I sell my property today. Because, it a good policy aimed at reducing home prices and stabilising housing market in the long run.
Very insightful and unbiased view
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Well explained that the genuine home buyers are not so affected as is made out.
Thanks for clarifying all doubts about Indexation
Local are tax more then NIR and foreign investors.
How and why different between two class.
Farmers are free from tax on selling land .why ? Transfer within family is different
Totally agree mam, I won't affect the middle class as much as it is being anticipated.
You had a different perspective than most other youtubers on capital gains on real estate. Thanks for the video .
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Really you are superb, a very pragmatic and useful video, an eye opener to us all. Many thanks !!
Appreciate your kind words. Hope you would help in spreading the word about our channel and encourage others to subscribe as well!
@@MoneylifeNewsBites Of course, I would, yours is worth that !
Thanks, cleared many doubts. However as you rightly pointed out at the beginning, the suddenness of change is not good for a democracy and government cannot piss off voters without facing consequences asthe recent election results show, so madam FM should be careful in future,
If real estate gives you a 2% CAGR, why do all the financial gurus from outside India say that real estate is a core investment to become a millionaire? Is it because interest rates outside India are very low, or is it due to the refinancing process? Do we have a refinancing process in India, and is it helpful?
Contradicting urself , as who are the real buyers of property.? Investors or home buyers.
Donation now not deducted from income. What about social responsibility fund of co.
Will co get deduction from staff medical insurance?
Also, transaction frequency will increase. Nobody will be incentivised to hold on to property. That will help the govt garner more through stamp duty
This is signal to rich to start buying real estate and that stock market may crash in 1 year, so sell and buy real estate. Common man will be away from buying now and then after things are managed, next year budget, indexation will come back and possibly the capital gains also will reduce. Uniformity is good to serve different purpose but that means providing indexation to equity not vice versa and also not increasing tax on common man and let him choose whichever makes less tax indexation or direct tax. Also allow saving back in same asset in 1 year or 2 years to make it nill tax like 54A. That way people will be relaxed..
I'm surprised at your conclusion. Value of money at any point of time is real. Indexation is fair as it is based on inflation. It's ridiculous to argue government has a right to tax people even on basis of its own inefficiency to manage inflation.
What nonsense are you saying.
Besides every investor has taken his personal risk about the property and expended his resource in maintaining it. The goverment and civic agencies have merely profited from collecting taxes on it.
Your argument would be logical if the government pays back compensation in case of a loss in the transaction.
Instead the government introduced circle rates which are not always realistic but which ensures profitable taxation
Excellent talk , covering many aspects of real estate and indexation.
This includes shock therapy govt in last decade.
I concur the views on reality and aspirations , but in long run run it may be a blessing to all.
You're welcome! Please subscribe to our channel for more such content.
People who will sell property will take tax amount from the person who buys it, do end user buyer will bear it.
Wadra without payment is called investor . Get tax free returns onso called agriculture land which actually non agriculture land
Pl let me know what if we inherited prroperty and it is 50 years old
Such an elaborate background building in the talk that makes assumptions after assumptions without producing any supportive data.
The ordinary citizens are going to be affected by this, this is not just for those who transact in real estate frequently, rather those will be less affected, because not holding a property for long will mean indexation doesn't matter.
It simply means the government does not have enough funds to take care of budget expenses and Interest payment. Outstanding debt of the government of India is over 160 lakh crore.
Mam, government has given you the choice between old and new taxation.
you will need to look at the date of a video blog -- government made the changes LATER
From now a family living in 1BHK cannot upgrade to 2 or 3 BHK.
RE bubbles are big reason for crashes in any economy, remember Japan, US and recently China.... deflating this bubble in RE is welcomed before it became a problem for India and common people. Support FM. No other investment is given this privilege of indexation except RE. Thanks FM.
Price of gold ,share also goes up in long run .
On one hand government is providing free houses to squatters/poor citizens and on the other hand middle classes are squeezed by high housing costs accompanied by highest taxes, stamp duties, registration costs, etc which make owning and maintaining a home a dream. Add to that parking charges, club house/swimming pool (which we hardly use) security personnel wages, housekeeping costs, lifts maintenance, compound/staircase electric bills make living in a city hell besides traffic/commuting woes. 14:29
To understand the overall impact of removal of indexation benefit in real estate transactions, will take time. It is too early to predict anything meaningful.
I think it's a better move to remove indexation benefits. It is simple now. I will infact pay less tax now if i sell my property.
Price stability will remain a mirage till pricing mechanism remains a black box in urban centres.
As we are all aware that there are relatively very few income tax payers. Removal of indexation will increase the cash dealings to avoid tax. So your explanation while it may sound logical but the so called wealthy investors will avoid tax by increasing the cash dealings. Already the stamp duty is very high. The FM should have tappered it down instead of a single blow by using grandfathering method
They should implement this new system of LTCG without indexation from 1 St April 2025 and not immediately.
One class of citizens who make huge money without paying taxes parking the same in real estate with artificially lower stamp value at the time of sale to launder money will be most hit.
Don't agree. Genuine buyers have been affected by the removal of indexation and the trade off of a lower 12.50 % tax is in fact a huge burden
I think it discourages real estate business and diverts money to share market
It is very illogical to remove logical indexation in a country like India having too much inflation in the economy lacking a stability...
Ofcourse, others may have other views....
What about corrupt ministers who put all their corrupt money into real estate will they be exempt
Insightful video. Beneficial to all except investors, and encourage tax payers to reduce cash payment component.
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Only problem with elite and holding a monopoly business. Middle class is hardly going to sell own home.
Much ado about nothing, indexation has not been eliminated but instead 2nd option has been provided at reduced tax rate of 12.5% LTCG tax, permitting people to choose old tax regime or new one which ever beneficial.
Cash component is going to sky rocket .. for many who think cash had gone out after demonetisation.. wake up. Cash money was always there and now it is going to just go through the roof ...
Many of us support the good work of the govt. But Nirmala Sithraman will go down in history as the most cruel finanace minister who had obstinately worked at killing middle class finances. Look at her - the.first finance minister to take away EEE status for EPF above one crore. The first finance minister who did not provide any substantial relief to middle class during 7 years even as basic inflation ( not denominated by managed CPI basket) makes people poorer. Even no relief for economically less well off. She is first to silently kill section 80C of exemptions by bringing new tax. Now she is killing old tax regime by providing exemptions only on new regime. LTCG, indexation, non rationalization of GST - list goes on. Definitely she does not have my vote and infact she does not have courage to fight an election. There should be constitutional amendment that PM and CCEA , CCS members should be only from Lok Sabha.
Very well put ms Dalal …also come with a table
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The worst finance minister in 75 years history of independence she keeps raising taxes every single budget most cruel to common man
Very informative. Thank you madam
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Thank you!
You're welcome!
very nice explanation Ma'm
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Interesting
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Thank you mam
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Thanks for informative video
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Thank you ma'am
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People who buy propertyfrom their ownmoney don't get any benefit.
Government wants money. Simple.
NOT 🚫 CONVINCED WITH YOUR CLARIFICATIONS
She doesn't understand the economics. I am wrong on her views. It is a step taken for Lodhas and adani who wants to sell their inventory.
Black money joins the chat
Y let them pay
Bahut sare serious reviews hai online. Please make a review in your humoorous style!
i dont think anyone can buy 1 sqft at worli for less than 2 lakh. he gave you wrong data
nah! it's 80k average 😂
just because you think bollyboys buying property there does not mean its expensive
This lady has totally lost it!
Property is the only asset way middle class or below rely on to amass some quick money for emergencies like big health treatment, kids marriage , even to build a house I have seen people sell some property and build the house..
It will encourage use of black money. And only rich and corrupt people will benifit.
Chuck out the arrogant finance minister and bring in Subramanianswami who is a real economist.
PIN CODE 400026 is not Worli Prabhadevi. It's PIN Code 400025
Perhaps a law abiding citizen finds it difficult to liveand has to weep in the closed doors
Hear raghav chadda speech in parliment
Real estate generares emplmoyment
😊
Boringly described, a serious Subject