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This is confirmed now. Indexation benefits reinstated as below for grand-fathering of Real estate ONLY?️?

Real estate bought before the budget day, 23/July/24, can choose to pay LTCG at the old rate of 20% with indexation or new at 12.5% Which ever is lower

Property bought on 23/July/24 or later will have only 1 option on LTCG which is 12.5%

Partial victory for taxpayers. Government provides option to tax payers to follow old method of indexation or not. But this is applicable only for properties bought till July 23rd 2024, the day of budget. Beneficial to all existing owners of property. But not for those who are going to acquire properties from now on.

A record 72.8 mn people filed their Income Tax Returns, as on 31st July.

Hope you did yours too! (

The Income Tax Department appreciates taxpayers & tax professionals for timely compliance, resulting in a record surge in the filing of Income Tax Returns (ITRs).

Here are the key highlights:

?More than 7.28 crore ITRs for AY 2024-25 filed till 31st July, 2024, a 7.5% increase from the 6.77 crore ITRs for AY 2023-24 filed in the corresponding period in the preceding year.

?Around 72% of taxpayers opted for the New Tax Regime, with 5.27 crore ITRs filed under it, compared to 2.01 crore under the Old Tax Regime.

?Over 69.92 lakh ITRs were filed on 31st July, 2024, with the highest hourly rate of 5.07 lakh filings between 7:00 pm to 8:00 pm.

?Over 3.2 crore successful logins on 31st July, 2024.

?About 58.57 lakh ITRs were received from first-time filers, indicating a widening of tax base.

?ITR-1, ITR-2, ITR-4, and ITR-6 were available from 1st April, 2024, with ITR-3 and ITR-5 released earlier than in previous years.

?About 10.64 lakh queries handled by the e-filing Helpdesk team.

?Resolution also provided through ORM on X(Twitter), handling 1.07 lakh e-mails between 1st April to 31st July, 2024, resolving 99.97% of the issues raised.

Details available in Press Release at: pib.gov.in/PressReleasePa…

New milestone: GST collection rises 10.3% to third highest at Rs 1.82 trn

_Redeem SGBs through RBI buyback windows: Tax free for individuals_
If you need to redeem your SGB investment, you must wait for the RBI's buyback window to start (starting from the 5th year of the SGBs).

"As per the tax law, redemption of SGB held by an individual is exempt from tax. Thus, redemption at RBI buyback windows will not be subjected to capital gains tax," says Vasudevan.

_When are gains from SGBs tax-exempt in your hands_
According to Vasudevan when SGBs are sold at stock exchanges it is called 'transfer of SGB'. "It is said that a SGB is redeemed if only the SGB is repaid by the RBI through its dedicated windows. There is no taxation incident on redemption of SGBs for an individual assessee," says Vasudevan.

"Exemptions have been provided only in case of individuals under section 47(viic) of the Income Tax Act, 1961 wherein any gains arising on redemption/ maturity of SGBs is not regarded as "transfer" and hence no capital gains tax shall arise on transfer of such SGBs," says Dalal.

Here's how experts have expressed their views on SGB taxation after budget 2024 proposals

_Deepa Dalal, Partner, Deloitte India_: Under the new regime, tax implications on sale of SGBs remains the same whether they are traded on stock-exchanges or off-market. If the SGBs are held for a period of more than 12 months before the date of transfer, the same shall be classified as long-term capital asset and chargeable to tax @ 12.5% (plus applicable surcharge and cess) without considering the indexation benefit. However, if the SGBs are sold/ transferred before holding the same for less than 12 months, the resultant gains would be charged to tax as per applicable rates.

_Amarpal Singh Chadha, Tax Partner and Mobility Leader, EY India_: SGBs are redeemable at the end of lock in period of 8 years and any capital gains arising at the time of redemption of SGBs is exempt as it is not regarded as transfer for the purpose of capital gains. Sale of SGBs at the stock exchange will be taxable as capital gains. If SGBs are purchased on stock exchange and sold within 12 months from the date of purchase, then the capital gains shall be classified as short-term capital gains (STCG) and taxed at applicable slab rates. SGBs being listed securities purchased through banks and others will be classified as short-term capital asset up to 12 months and will be classified as long-term capital asset after holding for more than 12 months.

*_Ashish Mehta, Partner at Khaitan & Co: As per section 2(42A) any listed security held for more than 12 months will qualify as a long-term asset. We agree the period of holding for SGBs listed on exchange should be 12 months. However, taxability will be as per section 112 and not 112A, i.e 20% with indexation and at 12.5% (without indexation) post Finance Bill 2024. SGBs taxability will not differ if the SGBs are bought from the stock market or from authorized banks / institutions.

_CA Prakash Hedge_: Only for individuals gain on redemption (whether at maturity at 8 years or before) is exempt from tax. Early redemption is allowed in the RBI buyback windows starting from the 5th year of the SGBs. However, if you are selling SGBs on the stock exchange and if the holding period is 12 months or less - SGBs would be short term assets (if the sale is on or after 23 July 2024). If the holding period is more than 12 months - SGBs would be long term assets. If they are sold, the rate of tax will be 12.5% (if the sale is on or after 23 July 2024). Application for SGBs can be submitted to the Banks and allotment will be made by RBI only. Even if they are purchased through other means than allotment from RBI or through stock market, the period of holding and taxation will remain the same as explained above.

He further added, "The increase in short-term capital gains tax from 15% to 20% is actually positive. This will deter those entering the markets for speculation but would encourage long-term investors to invest in the securities market."

How will LTCG and STCG be applied to mutual funds?

Finance Minister Nirmala Sitharam on Tuesday announced that short term gains on specified financial assets shall henceforth attract a tax rate of 20% instead of 15%, while that on all other financial assets and non-financial assets shall continue to attract the applicable tax rate.

The Finance Minister further mentioned that long term gains on all financial and non-financial assets, on the other hand, will attract a tax rate of 12.5%.

The equity mutual funds and shares with a 12-month holding period for long term will continue to attract tax of 20% (STCG) and 12.5% (LTCG) with effect from July 23, 2024

Property and mutual funds with a holding period of less than equal to 65% in debt and money market assets shall be classified as long-term after holding for 24 months, the LTCG will be 12.5% and STCG will be as per tax slab.

The debt funds will continue to be taxed as per tax slab.

"The increase in exemption limit for Long Term Capital Gains tax from ₹1 lakh to ₹1.25 lakh is a welcome change. While the changes in rates for LTCG and STCG were not anticipated, the markets will take them in their stride," said Venkat Chalasani, Chief Executive, AMFI.

"Rationalizing capital gains tax is another key theme, affecting different asset classes differently. If the indexation benefits for real estate investments has been removed, it could significantly impact home sellers. The increase in capital gains tax for equity markets and increase in STT on F&O has been met with negative market reactions," said Alekh Yadav, Head of Investment Products, Sanctum Wealth.

"Taxation on fixed deposits, debt mutual funds, bonds and market-linked bonds was kept unchanged. This was a bit damper for fixed income investors. That said, we don't expect significant change in investor sentiment. Overall, it is a pragmatic Union Budget from the financial market's perspective,” said Dhawal Dalal, President & CIO-Fixed Income, Edelweiss Mutual Fund.

"With the marginal increase in LTCG from 10% to 12.5%, long-term investors might be paying slightly higher taxes. However, with the exemption limit raised to Rs 1.25 lakh, small investors will see modest benefits. The increase of STCG from 15% to 20% will impact short-term equity investors. Although the tax rates are marginally increased, equity mutual funds remain an attractive investment opportunity compared to other asset classes. Therefore, we do not anticipate that the change in tax rates will significantly affect the flows towards equity mutual funds," said Feroze Azeez, Deputy CEO, Anand Rathi Wealth Limited.

“Despite the increase in LTCG to 12.5%, equity mutual funds continue to remain great long term investment options for investors. Governments continued focus on fiscal prudence and infrastructure spend bodes well for the economy. Investors are best served by continuing to focus on their asset allocation and investing regularly and not be swayed by short term market movements,” said Kaustubh Belapurkar, Director - Manager Research, Morningstar Investment Research India Private Limited.

"The increase in long-term equity capital gains tax from 10% to 12.5% has been a deterrent to the markets. India still has low tax rates as compared to other markets Globally. The markets may consider it negatively initially, but considering the future prospects and the potential to make money in India, I think it will be still very insignificant. The Government has also increased the threshold for long-term capital gains exemption from Rs 1 lakh per year to Rs 1.25 lakhs and this is a welcome step. Those investing for the long term could consider capital gains harvesting every year, up to this limit of Rs 1.25 lakhs every year, and reduce the taxation over a long period," said Rajesh Minocha, a Certified Financial Planner (CFP), Founder of Financial Radiance

Gold investment to attract LTCG tax of 12.5% instead of 20% with indexation, holding period cut to 24 months

Budget 2024 has reduced the holding period for capital gains on gold to qualify as long term capital gains from 36 months to 24 months and simultaneously cut the LTCG tax rate to 12.5%. Further, indexation available for LTCG calculation for gold has been removed.

Earlier, indexation for inflation was allowed while calculating long term capital gains on sale of gold and gold jewellery. Indexation allowed the seller to reduce the taxable capital gains by inflating the cost of acquisition as per notified cost inflation index. Earlier, if you have owned the gold for longer than three years, capital gains on its sale would be deemed long-term and subject to 20% tax. Now you will have to pay a flat 12.5% tax rate on long term capital gains on gold sold after a holding period of 24 months (36 months earlier).

The income tax slab rate will continue to be applicable to those who have short-term capital gains on gold.

The new rules for capital gains on gold come into effect from July 23, 2024 once the budget proposal are passed by the parliament.

As per the explanatory memorandum to the budget, "the short-term capital gains tax is now 20% on all financial assets, while the long-term capital gains tax was raised from 10% to 12.5% in the Union Budget for 2024–2025. Additionally, the Rs 1.25 lakh LTCG non-taxable ceiling has been raised from Rs 1 lakh.”

Prior to the budget 2024 announcements, the capital gains on physical and digital gold was calculated depending on the holding period. If the gold was sold before the completion of 36 months from the date of purchase, than capital gains are termed as short term capital gains or STCG. On the other hand, if the gold was sold after the period of 36 months which is termed as long term capital gains (LTCG) along with indexation benefit. The STCG is taxed at income tax slab rate applicable to your total income. The LTCG is taxed at 20% with indexation benefit.

The gold mutual funds are taxed at income tax slab rate applicable to your income. From April 1, 2023, the indexation benefit has been removed which is same as taxation of specified debt mutual funds.

Are you a Bank employee?

Did you take an "interest-free" loan from your Bank?

You need to pay tax on the "benefit" you got, says the Supreme Court.