Losing Indexation benefit - What it means to commoner
Just like any other hard working-working class, Mr. A worked hard bought 3 plots each for 20L as investment in 2024.
He wanted to redeem the benefit when the age is ripe and dreamt of his retirement life.
Now in 2030 age ripen and ready to sell his plots as deal was settled at 40L per plot, but learnt he has to pay 12.5 % tax on 20L benefit that he is making which is whooping ~2.5L per plot. over a period of time due to inflation of 6% each year that 20L anyway will be ~30L ( Plus some taxes and developments he has done for the plot included) which we call it CII and govt. give this benefit to seller. Now his gain will be 40,00,000 - 30,00.000 = 10,00,000 ( profit or capital gain) and he pay 20 % LTCG on it which will be 2L.
However now govt says no inflation will be considered which means CII is zero now Mr. A will have to pay tax on 40,00,000 - 20,00,000 = 20L @ 12.5% = ~2.5L.
Pros:
1. Ppl stop investing on it and some black money will be reduced(?)
2. Conversion of agri land to plots reduces and food chain might improve
3. Affordable houses to every one (look at cons)
cons:
1. Short term impact on real-estate as there will be no takers
2. Registration income to states might reduce
3. On going gated projects where ppl think safety heaven for investment will get impacted.
4. Long run the price go by actual cost + 12.5% or more LTCG
5. No sale of hereditary property and ppl might move to villages after retirement ( my wish)
You can add
But over all it was a blow and hence i posted about buying physical gold here
Due to this change
Note:
The CII given by govt. is less than actual inflation even now
- Sort By
for me, inflation and taxation are going to go upwards only but the question to be asked/raised to govt is what are they doing with the tax amount as apart from the expenditure/schemes they announce in every budget, nothing seems to have improved here..if the government can provide the basic facilities like good roads where it doesn't take 1hr to travel 15kms in the city, water, public services like transport etc. then its fine but the quality of government services and their infra is going in the opposite direction i.e. bad to worse and soon worst and we have these heavy taxes 😌
only when education and hospitalization is owned by the government and provided free/equally to all then only we can say India is a developed nation which is never going to happen, also on the other hand with a population of close to 145 crores we have only less a lakh of people showing more than 10L tax income and pay almost 50% of the total tax😀 so if you are in that 1L list and earning more than 15L then its going to be life long-suffering as you end up paying 25-30% direct tax and with the left out money from salary which you use to buy things, you will indirectly end up with 5-28% GST
https://www.desidime.com/discussions/possible-o...
Properly explained with use case...
Instead of just talking and having unproven hypothesis
Sharing KB's answer: Answer to What is the 12.5% tax on profits if houses and plots are sold? by Kanthaswamy Balasubramaniam https://www.quora.com/What-is-the-12-5-tax-on-p...
thats obvious. Let me tell you i bought a property in 2003 for 21L and sold last year for 62L, still paid no tax, why due to indexation or CII.
Now i have to pay tax.
It varies case to case but on broader sense max ppl come into tax bracket and cannot escape due to indexation on cost acquired + development charges.
Real estate dealers buy and sell now pay 12.5% after 1year.
A typical 100 plot venture has 2-3yrs tenure before marked everything sold. They suffer
"Just like any other hard working-working class, Mr. A worked hard bought 3 plots each for 20L as investment in 2024.
He wanted to redeem the benefit when the age is ripe and dreamt of his retirement life.
Now in 2030 age ripen and ready to sell his plots as deal was settled at 40L per plot,"
Masses in India are out here busting their arshses for work yet cant afford 3 proper meals a day for family; forget roof over head.
Wah re commoner like Mr.A with 3 plots are root of all evil = GREED
Hoping next budget PMO enforces separate VIP slabs of 24% LTCG on 2nd plot & 48% LTCG on 3rd plot especially for VIP commoners like Mr.A to stop extreme income inequality & rising employed poverty
Just like any other hard working-working class, Mr. A worked hard bought 3 plots each for 20L as investment in 2024.
I never imagined so many hard working-working class people are buying plots to invest their money.
Only after this budget realised from the uproar. I still wonder how much of it are still just hypothesis.
Loads of CAs are going to loose a chunk of customers once all variants of taxation gets simplified and that hard working class files their own ITR. Somehow I see CA posts mostly everywhere against this budget.
I just took plot example, but most middle & senior mgmt guys invested invested in such instruments, when STP & SEZ boom was high, still holding tight.
I live in financial capital of india and the roads are so high quality like either you would get in an accident because of avoiding portholes or by driving into portholes while coming at a speed >60.
Saw this happen with swiggy delivery person. It’s just so frustrating… what are we paying taxes for?
For farmers? Yesterday i bought 1kg tomato @ 100Rs
🫡
for me, inflation and taxation are going to go upwards only but the question to be asked/raised to govt is what are they doing with the tax amount as apart from the expenditure/schemes they announce in every budget, nothing seems to have improved here..if the government can provide the basic facilities like good roads where it doesn't take 1hr to travel 15kms in the city, water, public services like transport etc. then its fine but the quality of government services and their infra is going in the opposite direction i.e. bad to worse and soon worst and we have these heavy taxes 😌
only when education and hospitalization is owned by the government and provided free/equally to all then only we can say India is a developed nation which is never going to happen, also on the other hand with a population of close to 145 crores we have only less a lakh of people showing more than 10L tax income and pay almost 50% of the total tax😀 so if you are in that 1L list and earning more than 15L then its going to be life long-suffering as you end up paying 25-30% direct tax and with the left out money from salary which you use to buy things, you will indirectly end up with 5-28% GST