Moneycontrol
Get App
Last Updated : | Source: Moneycontrol.com

Budget 2017: Lower holding period for capital gains a boon for homeowners

In his Budget speech Finance Minister Arun Jaitley said the holding period for considering gain from immovable property to be long term will be reduced to 2 years from the existing 3 years.


Moneycontrol Bureau


Homeowners seeking to sell their house after two years of getting possession will cheer Budget 2017-18 as the duration of holding to avail long term capital gains benefits is proposed to be reduced to 2 years from the earlier 3 years.


The move, which is aimed at boosting the real estate sector, is being widely hailed by stakeholders. “The announcement on long term capital gains on immovable property is an extremely good news for real estate investors as they can book profits by paying a bare minimum income tax at the end of two years only on profits earned from sale of property,” Getamber Anand, President, CREDAI National, said.

Close

In his Budget speech Finance Minister Arun Jaitley said the holding period for considering gain from immovable property to be long term will be reduced to 2 years from the existing 3 years.


“We also plan to extend the basket of financial instruments in which the capital gains can be invested without payment of tax,” Finance Minister Arun Jaitley said in his budget speech.


Long-term gains from the sale of property is exempt if invested in purchase or construction of a house property, with certain conditions. However, short-term capital gains are taxed at 20 per cent, except for equities where the tax treatment is different.


This proposed amendment comes into effect from April 1, 2018 and will apply in relation to the assessment year 2018-19 and subsequent years.


Anuj Puri, Chairman & Country Head, JLL India said that the move would lead to more activity in the real estate sector. “The time limit for capital gains to be considered as a long term gain has been reduced to 2 years from the earlier 3 years. More supply will enter the housing market now,” Puri said.


Shishir Baijal, Chairman & Managing Director, Knight Frank India, felt that the amendment to the long term capital gains exemption will lead to greater compliance. “The move to reduce the tenure of the Long Term Capital Gain from 3 years to 2 years will encourage compliance amongst the real estate stakeholders,” Baijal said.

Exclusive offer: Use code "BUDGET2020" and get Moneycontrol Pro's Subscription for as little as Rs 333/- for the first year.

First Published on Feb 1, 2017 07:45 pm
Sections
Follow us on