NRI Asking: Can I Claim Indexation Benefit on House Sale?

Ans: As per Budget Proposals-2024, for the F/Y 2024.25, you may opt any of the following Options :
(a). Tax Rate 20% with Indexation or,
(b). Tax rate 12.50% without Indexation.
You may calculate the tax accordingly & go for the minimum tax option.
Most welcome for any further clarifications. Thanks.

Ans: The Indian Budget 2024 introduced significant changes to the taxation of Long Term Capital Gains (LTCG) on property:

Removal of indexation benefit: This was the initial proposal.
Option to choose: Due to widespread criticism, the government later allowed taxpayers to choose between a 12.5% tax rate without indexation or a 20% tax rate with indexation.  
Key Factors for Your Case
Date of Sale Deed Registration: This is generally considered the date of sale for tax purposes. In your case, it's July 28, 2024.
Option to Choose: Since your sale deed registration is after July 23, 2024 (when the budget changes were announced), you have the option to choose between the 12.5% tax rate without indexation or the 20% tax rate with indexation.
Considerations and Recommendations
Consult a Tax Professional: Due to the complexity of the situation and potential tax implications, it's strongly recommended to consult a tax professional or chartered accountant. They can provide tailored advice based on your specific circumstances.
Analyze Both Options: Calculate the tax liability under both options (12.5% without indexation and 20% with indexation) to determine the most beneficial choice for you.
Consider Other Factors: Factors like the holding period of the property, the purchase price, and other expenses might also influence your decision.
Note: The sale agreement date (May 6, 2024) might not have a direct impact on the tax calculation in this case.

By carefully considering these factors and seeking professional advice, you can make an informed decision and optimize your tax liability.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

Ans: Firstly, indexation is available only for long term capital asset.

The indexation benefits for "shares and debentures" are not available to NRIs.

Please check with your CA before moving ahead.