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Interest Cost and Stamp Duty Excluded from LTCG Base Price, Says Revenue Secretary

editor — Fri, 26 Jul 2024 05:56:45 +0000

On Wednesday, Revenue Secretary Sanjay Malhotra clarified that interest costs and stamp duty paid during the purchase of immovable property will not be considered when calculating long-term capital gains (LTCG). The recent Budget proposes a revised LTCG taxation framework for real estate, which will now feature a lower tax rate but exclude indexation benefits.

Malhotra explained that the base price for LTCG calculation will continue to be the amount paid to the seller, excluding any interest paid on loans used to acquire the property. Additionally, stamp duty payments will also not be factored into the base price for capital gain calculations, maintaining consistency with current provisions.

Regarding the review of the Income Tax Act of 1961, Malhotra highlighted that the aim is to simplify and streamline the Act to make it more user-friendly and concise. While drawing on previous work, the review will involve consultations with various stakeholders, and a revised IT law may be proposed in the next budget.

In relation to ongoing litigation concerning Angel Tax, Malhotra indicated that these issues could potentially be resolved under the new Direct Tax Vivad se Vishwas scheme.

Source: BusinessLine

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No Reconsideration for LTCG Tax Changes on Property Sales: Government Stance

editor — Fri, 26 Jul 2024 05:23:04 +0000

The government has no plans to reconsider the recent changes to the Long Term Capital Gains (LTCG) tax on property sales, despite concerns over the removal of the indexation benefit, according to a report by news agency ANI.

“There will be no rethink on the LTCG provisions made in the budget as they are beneficial for taxpayers,” sources told ANI.

The Union Budget 2024-25 announced a significant change in LTCG taxation, simplifying the tax structure across asset classes and removing the indexation benefit for capital gains on property sales. This change has raised concerns about increased tax liabilities for property owners and the potential for more black money in property transactions.

The Central Board of Direct Taxes (CBDT) addressed these concerns via a clarification on the social media platform X. The Income Tax Department dismissed claims that the new budget proposal would lead to significantly higher taxes on real estate profits. It highlighted that the proposed flat tax rate of 12.5% without indexation could be more favorable in many cases than the previous 20% rate with indexation benefits.

According to the Income Tax Department, real estate returns typically range from 12-16% annually, higher than the 4-5% inflation rate used for indexation. Therefore, the new tax regime could result in substantial tax savings for many taxpayers.

The department provided examples showing the benefits of the new tax regime for properties sold after different holding periods. For instance, properties held for five years with a 1.7 times price appreciation, for 10 years with a 2.4 times appreciation, or purchased in 2009-10 and appreciated by 4.9 times or more would benefit from the new tax rate. However, if the annual return on property is less than 9-11%, the previous 20% tax rate with indexation may be more advantageous.

The Income Tax Department also emphasized that the new tax structure simplifies compliance, tax computation, filing, and record-keeping, and eliminates differential tax rates across asset classes.

Source: Livemint

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India Union Budget 2024 Highlights: Key Reforms and Fiscal Measures

editor — Thu, 25 Jul 2024 10:07:28 +0000

This PDF provides a comprehensive overview of the key highlights and significant changes introduced in the India Union Budget 2024. It covers major policy reforms, fiscal measures, and sector-specific allocations aimed at driving economic growth and development. This summary offers insights into how the budget’s provisions impact various sectors and the overall economic landscape.

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Union Government Highlights GST Benefits: Reduced Tax Burden & Compliance Costs, Expanded Coverage in Budget 2024-25

editor — Thu, 25 Jul 2024 05:33:19 +0000

The Union government has highlighted the positive impacts of the Goods and Services Tax (GST) on reducing the tax burden for the common man, lowering compliance costs, and decreasing logistics expenses for businesses. Additionally, GST has boosted revenues for both Central and state governments.

In the Union Budget for 2024-25, it was announced that GST would be extended to additional sectors. Finance Minister Nirmala Sitharaman described GST as a “success of vast proportions” and emphasized the government’s commitment to simplifying and rationalizing the tax structure, aiming to expand GST coverage.

All major taxpayer services under GST, as well as many services under Customs and Income Tax, have been digitized, enhancing efficiency. In June 2024, India’s gross GST collection rose to Rs 1.74 lakh crore, reflecting a 7.7% increase compared to the previous year. This brings the total GST collection for the first quarter of the fiscal year to Rs 5.57 lakh crore, with a record high of Rs 1.87 lakh crore collected in April 2023.

Experts attribute economic growth to the GST reforms, which have simplified compliance and reduced tax burdens. The proposed tax structure rationalization, along with new tax regime changes like increased standard deductions, is expected to benefit the salaried class and boost disposable income, positively influencing housing demand.

The GST system, now seven years in place, has provided relief by reducing taxes on household items like appliances and mobile phones. The number of GST taxpayers increased from 1.05 crore in April 2018 to 1.46 crore in April 2024. The GST Council has also recommended waiving the annual return filing requirement for taxpayers with an annual turnover of up to Rs 2 crore for the fiscal year 2023-24.

Source: The News Minute

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Key Highlights of the Union Budget 2024-25

editor — Tue, 23 Jul 2024 08:52:45 +0000

Union Finance and Corporate Affairs Minister Smt. Nirmala Sitharaman presented the Union Budget for 2024-25 in Parliament today. Here are the key highlights:

Part-A

Budget Estimates 2024-25:

Total Receipts (excluding borrowings): ₹32.07 lakh crore
Total Expenditure: ₹48.21 lakh crore
Net Tax Receipt: ₹25.83 lakh crore
Fiscal Deficit: 4.9% of GDP, with a target to reduce it below 4.5% next year
Inflation: Low and stable, approaching the 4% target; Core inflation (excluding food and fuel) at 3.1%

Budget Focus Areas: Employment, Skilling, MSMEs, and the Middle Class

Prime Minister’s Five Schemes for Employment and Skilling:

Scheme A - First Timers: Up to ₹15,000 in three installments to first-time employees registered with EPFO.
Scheme B - Job Creation in Manufacturing: Direct incentives for both employees and employers in the first four years of employment.
Scheme C - Support to Employers: Reimbursement of up to ₹3,000 per month for two years towards EPFO contributions for additional employees.
New Skilling Scheme: Skill development for 20 lakh youth over five years and upgrading 1,000 Industrial Training Institutes.
New Internship Scheme: 1 crore youth to be provided internships in 500 top companies over five years.

Nine Budget Priorities in Pursuit of ‘Viksit Bharat’:

Agricultural Productivity and Resilience: ₹1.52 lakh crore allocated; introduction of high-yield, climate-resilient crop varieties; certification for natural farming.
Employment & Skilling: Implementation of employment-linked incentives and establishment of hostels and crèches for working women.
Inclusive Human Resource Development and Social Justice: Development of industrial nodes, financial support for Andhra Pradesh, and women-led development initiatives.
Manufacturing & Services: Credit guarantees for MSMEs, enhanced Mudra loans, and support for e-commerce export hubs.
Urban Development: Investment of ₹10 lakh crore in urban housing, development of street markets, and transit-oriented development plans.
Energy Security: Policies for energy transition, pumped storage projects, and advancements in nuclear energy.
Infrastructure: ₹11.11 lakh crore for capital expenditure, support for state infrastructure investments, and comprehensive tourism development.
Innovation, Research & Development: Operationalization of Anusandhan National Research Fund and expansion of the space economy.
Next Generation Reforms: Digitalization of land records, integration of e-shram portal, and introduction of NPS-Vatsalya for minor contributions.

Part-B

Indirect Taxes:

GST: Simplification and rationalization of the tax structure to extend GST to additional sectors.

Sector-Specific Customs Duty Proposals:

Medicines and Medical Equipment: Full exemption for certain cancer drugs and changes in customs duty on x-ray equipment.
Mobile Phones and Related Parts: Reduction in basic customs duty on mobile phones and components.
Precious Metals: Reduction in customs duties on gold, silver, and platinum.
Other Metals: Removal of customs duties on various metals and concessional duties on copper scrap.
Electronics: Exemption on copper for resistor manufacturing.
Chemicals and Petrochemicals: Increased customs duty on ammonium nitrate.
Plastics: Increased customs duty on PVC flex banners.
Telecommunication Equipment: Increased customs duty on certain telecom equipment.

Trade Facilitation:

Direct Taxes:

Continued efforts to simplify taxes, improve services, and reduce litigation.
Simplification of Reassessment: Adjustments in the time limits for reopening assessments.
Capital Gains: Revised tax rates and increased exemption limits.
Taxpayer Services: Digitalization of customs and income tax services.
Litigation and Appeals: Introduction of the 'Vivad Se Vishwas Scheme, 2024' and increased monetary limits for appeals.
Employment and Investment: Abolition of angel tax and simplified tax regimes for foreign companies and cruise tourism.
Deepening Tax Base: Increased Security Transactions Tax and taxation on share buybacks.

Social Security Benefits:

Finance Bill Proposals:

For more details, you can access the full press release here.

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Real Estate Budget 2024: Key Expectations for Industry Status, GST Reforms, and Affordable Housing

editor — Tue, 23 Jul 2024 07:30:28 +0000

Real estate developers in Noida and Greater Noida are looking to the upcoming Budget, presented by Finance Minister Nirmala Sitharaman on July 23, as an opportunity to address longstanding sector concerns. They are advocating for the sector to be granted ‘industry status’ to facilitate easier access to funding and seek relief from current GST challenges, including the 28% tax on cement.

Key expectations from the Budget include:

Industry Status: Developers are calling for the real estate sector to be recognized as an industry, which would provide access to lower-cost financing and other benefits. They believe this status will help spur investment and economic growth.
GST Reforms: There is significant concern over the high GST rate on cement, which is currently set at 28%. Developers argue that reducing this rate would lower building costs and improve affordability for homebuyers. Additionally, they seek GST input credits for residential real estate to stabilize costs and enable developers to pass savings onto buyers.
Tax Incentives: The industry body CREDAI suggests that tax reforms, including lower income taxes for both corporations and individuals, along with targeted incentives, could boost investment. They also advocate for an expansion of the SWAMIH stress fund to support the sector.
Affordable Housing Support: Experts propose increasing the home loan interest exemption to Rs 8 lakhs annually and adjusting Section 80C to cover housing loan principal deductions or raising its limit to Rs 5 lakhs. They also recommend raising the affordability cap for housing in metro areas from Rs 45 lakh to Rs 75 lakh.
Regulatory Improvements: Developers emphasize the need for a streamlined approvals process and enhanced transparency through a robust regulatory framework. They suggest innovative financing mechanisms, such as green bonds for sustainable development, to align economic growth with environmental goals.
Foreign Investment: To stimulate growth and innovation in the luxury market, easing FDI regulations and simplifying GST are seen as crucial steps. Simplifying GST procedures and reducing input costs for materials like steel, cement, and fuel are also high on the agenda.

The real estate sector is hopeful that these budgetary measures will address its critical issues and boost the industry’s contribution to economic growth.

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Economic Survey 2024: Govt Unveils ‘Amrit Kaal’ Strategy with 6 Key Focus Areas

editor — Tue, 23 Jul 2024 07:01:04 +0000

The Economic Survey 2024 projects India’s real GDP growth to be between 6.5 and 7 percent for FY24, identifying six critical areas for development under the ‘Amrit Kaal’ strategy. Finance Minister Nirmala Sitharaman presented the survey in Parliament on July 22, ahead of the budget.

Growth Strategy for Amrit Kaal: Six Key Focus Areas

The government’s growth strategy for the Amrit Kaal focuses on six essential areas to drive economic progress and sustainability:

Enhancing Private Investment: The strategy highlights the need to boost private sector investment to stimulate economic growth.
Supporting MSMEs: Expanding and supporting Micro, Small, and Medium Enterprises (MSMEs) is a priority, recognizing their crucial role in the economy.
Agriculture as a Growth Catalyst: The government plans to unlock the potential of agriculture as a significant growth driver by addressing existing policy barriers.
Financing the Green Transition: Securing funding for India's green transition is vital for sustainable development and environmental protection.
Bridging the Education-Employment Divide: Tackling the disconnect between education and employment is essential to equip the workforce with relevant skills.
Strengthening State Capacity and Capability: Efforts will focus on enhancing the capacity and capability of state institutions to effectively implement policies and drive growth.

Source: Moneycontrol

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Economic Survey 2024: India’s Real GDP Growth at 8.2% in FY24

editor — Tue, 23 Jul 2024 05:16:28 +0000

India’s economy maintained its robust growth from FY23 into FY24, overcoming numerous external challenges. The Economic Survey 2024 reveals that India’s real GDP increased by 8.2 percent in FY24, surpassing the 8 percent mark in three out of four quarters.

Finance Minister Nirmala Sitharaman presented the annual survey in Parliament on Monday, marking the beginning of the Budget session.

The survey highlights that a focus on macroeconomic stability minimized the impact of external challenges on India’s economy.

Key Highlights from the Economic Survey on Economy and Growth

In 2023, the global economic landscape showcased diverse growth patterns. The April World Economic Outlook reported a global growth rate of 3.2 percent. However, this figure conceals a complex mix of domestic structural issues, geopolitical conflicts, and the effects of monetary policy tightening that resulted in varied growth trajectories among countries.

India’s push on capital expenditure and sustained private investment momentum boosted capital formation growth. Gross Fixed Capital Formation rose by 9 percent in real terms in 2023-24.

Moving forward, healthier corporate and bank balance sheets are expected to further enhance private investment. Positive trends in the residential real estate market indicate a significant increase in household sector capital formation.

Inflationary pressures from global disruptions, supply chain issues, and monsoon variability have been managed effectively through administrative and monetary policy responses. Consequently, retail inflation, which averaged 6.7 percent in FY23, declined to 5.4 percent in FY24.

The general government’s fiscal balances have improved progressively despite expansionary public investment. Gains in tax compliance, driven by procedural reforms, expenditure restraint, and increasing digitization, helped achieve this balance.

Despite subdued global demand for goods, strong services exports largely counterbalanced the external balance. As a result, the Current Account Deficit (CAD) stood at 0.7 percent of GDP in FY24, an improvement from the 2.0 percent deficit of FY23.

India’s economy has recovered and expanded in an orderly fashion post-pandemic. The real GDP in FY24 was 20 percent higher than its level in FY20, a feat achieved by only a few major economies. Prospects for continued strong growth in FY25 look promising, subject to geopolitical, financial market, and climatic risks.

Source: News18

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IMF Raises India’s GDP Growth Forecast to 7% for FY25: Key Insights

editor — Thu, 18 Jul 2024 06:19:01 +0000

The International Monetary Fund (IMF) has revised India’s GDP growth forecast for the fiscal year 2024-25 upwards by 20 basis points to 7%, citing increased private consumption, especially in rural areas. The latest update to the IMF’s World Economic Outlook (WEO) highlights that this upward revision builds on improvements observed in 2023.

In the subsequent fiscal year 2025-26, the IMF anticipates a slight moderation in growth to 6.5%, aligning with its previous projections from the April WEO report.

India’s GDP expanded by 8.2% in 2023-24, surpassing the 7% growth recorded in 2022-23. This growth was bolstered by a robust 7.8% expansion in the fourth quarter, according to provisional estimates from the National Statistical Office (NSO).

Earlier, the Reserve Bank of India (RBI) had projected a 7.2% growth rate for FY25. RBI Governor Shaktikanta Das noted India’s progress towards a significant structural shift in its growth trajectory, expressing confidence in sustaining an 8% annual GDP growth rate over the long term.

Meanwhile, the IMF has also raised China’s growth forecast for 2024 by 40 basis points to 5%, driven by a rebound in private consumption and strong export performance in the first quarter. For the calendar year, IMF projects India’s growth rates at 7.3% in 2024 and 6.5% in 2025.

The IMF’s Chief Economist emphasized that Asia’s emerging markets, particularly India and China, continue to drive global economic growth. However, he cautioned that the momentum in emerging Asia is showing signs of weakening over the next five years.

Globally, the IMF’s growth projections remain unchanged at 3.2% for 2024, with a slight increase to 3.3% in 2025. The organization expects global inflation to decelerate to 5.9% in 2024 from the previous year’s 6.7%, indicating a gradual stabilization despite lingering pressures from energy and food prices.

For more detailed insights, please refer to the original source: Business Standard –

IMF Raises India’s GDP Growth Forecast by 20 Basis Points to 7% for FY25

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Rajasthan Budget 2024: Key Highlights and Major Announcements by Deputy CM Diya Kumari

editor — Sat, 13 Jul 2024 06:09:48 +0000

The budget introduced new policies and established institutions across various sectors, including finance, youth, agriculture, urban development, tourism, transport, and the tech-driven economy. The Budget aims to fulfill major promises made by the ruling Bharatiya Janata Party.

Key Points from the Press Note:

VAT and Duty Reductions:

Reduction in VAT rates on petrol, diesel, PNG, CNG, and aviation turbine fuel.
Abolition of land tax, mandi tax on sugar and jaggery, and electricity duty on auxiliary power for captive plants.
Reduction of stamp duty for various categories, including family property exchanges and housing for war widows.

Registration & Stamps Department:

Rationalization and reduction of stamp duty rates on various documents.
Exemptions on stamp duty for electricity connection agreements, apprenticeship deeds, and certain family settlements.
Full exemption on registration fees and stamp duty for government or charity-provided houses to war widows' families.

Commercial Taxes Department:

Transport Department:

Excise Department:

Mining & Petroleum Department:

Formulation of a new mining policy and reduction in security deposits for small mining leases.
Facility for installment payments for extended leases and promotion of the private sector in mineral exploration.
Auctioning of major mineral blocks and establishment of research centers for ceramics and rare earth elements.

Investment Promotion:

Amnesty Schemes:

Revenue Department Enhancements:

Transport and Mining Department Modernizations:

For more details, you can access the full Budget Speech, Press Note, Budget Notification, and Finance Bill through the following links:

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