Realty beckons: Will your taxes skyrocket by 1,000%?

livemint.com:

₹100, which has appreciated at a compounded annual growth rate of 5% over the past two years (FY23 to FY25) to ₹110. Adjusting for inflation using the Cost Inflation Index (CII), the current purchase price is ₹109.6 (calculated as 100 * 363/331).

Under the old structure, the tax amount would be ₹0.10, compared to ₹1.30 under the new tax structure, representing an increase of over 1,000% in tax liability. If the holding period extends to 20 years, the inflation-adjusted purchase price would exceed the market value, reaching ₹321, resulting in a long-term capital loss of ₹55.90.

While the old regime allowed this loss to be offset against capital gains from other asset classes for up to eight years, the new regime taxes all scenarios without providing such offsets.
Refer to the graphics below: "The new structure will impact relatively shorter-term investments (less than five years) where market price growth is below 10% p.a.

Conversely, the impact of this new regime would be neutral or marginally beneficial for investments with longer holding period (above 10 years) and where property price appreciation is more than 10% p.a," according to a report by CLSA, a capital markets and investment group focused on alternative investments. Note that you can save taxes under section 54EC by investing up to ₹50 lakh of capital gains in specified bonds, and up to ₹10 crore under section 54 by buying or constructing a house.

The new tax structure will not affect end-users who reinvest in new properties but will impact real estate investors seeking to profit and invest elsewhere. The abolition of indexation and amendments to reporting rental income will also limit the expenses investors can claim, increasing taxable income and reducing