Real estate sector is the most affected one under the new taxation policy proposed in the budget.
New budget proposals on real estate gains.To calculate the tax liability under the new budget, we need to consider the details provided:
Purchase Price (10 years ago): ₹50,00,000
Selling Price (tomorrow): ₹1,00,00,000
Capital Gains: ₹1,00,00,000 – ₹50,00,000 = ₹50,00,000
Tax Rate: 12.5% (as mentioned)
Under the new budget, with the removal of indexation benefits, the entire capital gain is subject to tax at the specified rate.
Calculation:
Capital Gain: ₹1,00,00,000 – ₹50,00,000 = ₹50,00,000
Tax Rate: 12.5%
Tax Liability: ₹50,00,000 * 12.5% = ₹6,25,000
Therefore, under the new budget proposal, if you sold your flat tomorrow for ₹1 crore after purchasing it for ₹50 lakhs ten years ago, your tax liability would be ₹6,25,000.
Impact of Removing Indexation Benefits:
Previously, indexation allowed you to adjust the purchase price for inflation, significantly reducing the taxable gain. Without indexation, the entire nominal gain is taxed, increasing the tax liability.