By C.A. Manish Thacker

Union Budget of India 2024 aimed at simplifying long term capital gain structure by keeping the holding period for all listed securities, including REITs & INREIT’s, at 1 year and for all non-listed assets (including property and gold) at 2 years.

This is a welcome step for all investors since the maximum holding period is now reduced to 2 years instead of 3 years.  This benefit has been marginally offset by increase in LTCG rate from 10% to 12.5% in case of listed securities. Moreover, removal of indexation benefits will especially hurt those investors who fail to generate superior returns over inflation since they will have to pay tax on even mediocre returns.

However, an investor can still save capital gains by taking benefit of Section 54EC (Investment in specified Infra bonds) & Section 54 & Section 54F by buying residential house property. Overall budget seems to take a balanced approach of rationalising tax structure with tax rates.

(The author of this note is an eminent chartered accountant based in Mumbai)