New Delhi, April 6 -- Budget 2024 scrapped the indexation benefit-a provision that allowed adjusting prices for inflation-to make tax rates uniform across asset classes. For real estate, the tax on long-term capital gains (LTCG) - when a property is held for at least two years-was reduced from 20% with the indexation benefit to 12.5% without it.

Following concerns that this could increase the tax liability for real estate investors, the government introduced a grandfathering clause to allow indexation on properties bought before 23 July 2024-the day the budget was presented. Under the clause, if the new 12.5% tax rate results in a higher liability than the previous 20% rate with indexation, the excess tax will be ignored.

However, if th...