The government is looking at several options to address concerns from the real estate sector as representations pour in at North Block regarding the recent budget announcement on indexation removal.
The real estate shares, including Godrej Property, DLF, Oberoi Realty, and Phoenix Mill, soared high, which sent the Nifty realty index in upward momentum amounting to 2.55 per cent.
Godrej Properties, the real estate arm of the Godrej industries, jumped more than 5.5 per cent on the Indian bourses. DLF, Oberoi Realty, and Phoenix Ltd. were trading above 3.09 per cent, 2.66 per cent and 1.97 per cent respectively.
Removal of Indexation
.jpg)
.jpg)
In Budget 2024, the FM announced the withdrawal of indexation benefits from real estate and lowered the long-term capital gains (LTCG) tax from 20 per cent to 12.5 per cent.
By factoring in inflation when determining an asset's purchase price, indexation lowers gains and eventually tax obligations.
Grandfathering clause extension
According to a CNBC-TV18 report, while the government is considering its options, no decision has been made as of yet. According to CNBC-TV18, the government might prefer to implement a grandfathering clause that would keep transactions completed before July 2024 eligible for the prior indexation rules.
Grandfathering is the term for a clause that preserves certain benefits or conditions for investments or transactions made prior to the implementation of a new law or regulation.
The government is also considering giving taxpayers the option to choose between the new and old LTCG regimes when it comes to real estate transactions.
Real estate stocks
The Godrej properties zoomed over 5 per cent on the Indian bourses. The stock opened at Rs 2,880.00 today and touched a day-high level of Rs 2,994.00 per share. The stock touched a 52 week high of Rs 3,402.70 per share on July 16, 2024.
The stock was trading around Rs 2934.85 per share on D- street at 10.40 am.
DLF (Delhi Land and Finance) shares also soared more than 3.09 per cent on Dalal Street, the stock was trading around Rs 829.20 per share.
The DLF has recorded a day-high and 52-week-high level of Rs 844.30 per share and Rs 967.60 per share, respectively, on the National Stock Exchange.
.jpg)
The residential real estate giant Oberoi Realty's shares also zoomed past 2.66 per cent on Dalal Street. The stock opened at Rs. 1,730.10 per share touching a day-high level of Rs. 1,775.00 per share today.
The stock has recored a 52-week high level of Rs 1,953.05 per share and an all-time high level of Rs 1,953.05 per share on June 14, 2024.
The stock was trading around Rs 1740.00 per share on the National Stock Exchange at 11.18 am
.jpg)
