Raghav Chadha Labels Removal of Indexation Benefit a ‘Grave Mistake’ in Rajya Sabha – Here’s Why

Raghav Chadha Labels Removal of Indexation Benefit a ‘Grave Mistake’ in Rajya Sabha – Here’s Why

On Thursday, Rajya Sabha MP Raghav Chadha of the Aam Aadmi Party (AAP) criticized the central government for removing the indexation advantage on the sale of older property, as stated in the Union Budget 2024. Black money will enter the nation, according to Raghav Chadha, if this benefit is eliminated. “People will never be able to buy their dream homes,” Raghav Chadha said during the Rajya Sabha’s consideration of the Union Budget 2024–25. He urged the national government to reverse its decision. He said that the plan will result in a significant decrease in investments in the real estate industry and increased corruption in the industry.

“Restore long-term capital gains indexation. Investors are enticed to invest globally through several forms of incentives. He continued, saying that eliminating indexation is the same as “penalizing investors” rather than raising taxes in this country and disincentivizing the investment class. According to Raghav Chadha, the plan included in Budget 2024 by Union Finance Minister Nirmala Sitharaman will result in significant taxation for those selling their older properties.

In this nation, three things will occur if indexation is not reinstated. People would never be able to purchase their “dream homes,” according to Chadha, who also predicted a decline in real estate investment. The AAP MP added that there will be an undervaluation of real estate transactions, with buyers purchasing homes at “circle rates” and never disclosing the true value of the asset. “Third, there will be a huge inflow of black money if you don’t roll back this decision to withdraw indexation,” he added.

In addition, Chadha emphasized the heavy tax burden that the average person bears and called for a thorough analysis of both direct and indirect taxes. “We impose taxes like the Europeans do, to get services like sub-Saharan countries,” he stated. The government suggested lowering the long-term capital gains tax on immovable properties from 20% to 12.5% in the Union Budget 2024–2025, however they also eliminated the indexation advantages to account for inflation.

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The Indexation available under Section 48 of the Income Tax Act, which is currently available for property, gold, and other unlisted assets, has been proposed to be removed for the calculation of any long-term capital gains, as per the Memorandum to the Union Budget. The rate will be rationalized to 12.5%.