ET Interview: New capital gains regime to aid future home buyers, says CBDT chairman Ravi Agarwal
CBDT chairman Ravi Agarwal said the new capital gains provision will be beneficial to prospective home buyers and investors, as they will have to pay substantially less tax than earlier even without indexation benefits if they sell the property after two years at a higher price.
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In an interview to ET, Agarwal said the decision to abolish the angel tax provision was aimed at providing tax certainty to investors. In the cases where notices were sent, and if the source of income is not legitimate, the department will work as per the earlier provisions under the law as the new provisions will be applicable from assessment year 2025-26, he said. «Going forward, if a person buys a property now and sells after three years, ultimately it sells minus cost which will be now taxed at 12.5%, which is much lower… There should not be any cause of concern to the people with the present inventory and who are about to buy,» Agarwal said.The department has done its calculations and the new provision is not going to have any adverse impact on home buyers, the chairman said.
The budget proposed to reduce the tax rates on capital gains earned from the sale of house properties held for more than 24 months to 12.5% from 20%, but removed the benefit of indexation available to taxpayers. In the case of old properties, the grandfathering clause, as per the 2001 indexation of fair market value, would be applicable, Agarwal said.
