If my income includes any Long Term Capital Gains on Non Financial Assets, I am taxed on such income at 20% after considering Indexed Cost. Indexed Cost is Inflation index of Sale year/Inflation index of purchase year or 1.4.2001 (for assets bought before 1.4.01). Now wef 23.7.24, any sale of long term capital asset is taxed at 12.5% on Capital Gains at cost. The indexed cost benefit is not available. An exception is provided for resident individuals, where tax calculated at 20% on indexed cost is lower than the tax calculated at 12.5% on cost, such excess tax is ignored. So resident individuals are still able to benefit from capital gains calculated at 20% on indexed costs for properties acquired before 23.7.24.
What benefits I get and I don’t get:
- If my total income comprises this only or majorly this, I get the benefit of ‘exemption limit’ on this, viz, after using my other/ general incomes, I can use my exemption limit against this income, and if any taxable is left, I pay tax on that only
- I don’t get benefit of Deductions on this income
(refer example in the short term capital gain module)