New Delhi, July 30 -- A change introduced by the government in 2024 to ease capital gains tax on real estate has inadvertently created a tax trap that could leave many individuals paying more than expected.

The government had allowed taxpayers to choose between a lower 12.5% tax rate on long-term capital gains (LTCG) without indexation or a 20% rate with indexation from property sales.

This applies to properties sold on or after 23 July 2024. The concession doesn't extend to surcharge and cess calculations, leading to a higher overall tax burden. This article explains the changes in LTCG on real estate and what can be done to ease the tax burden.

The Finance Bill 2024 introduced the optional lower tax rate with retrospective effect for...