Sources have told CNBC-TV18 that the government is looking at options to address concerns from the real estate sector with regards to the recent budget announcements. While the proposals are being looked into, no final decision has been made.
The government prefers introduction of a grandfathering clause, which would allow transactions completed before July 2024 to continue benefiting from the existing indexation rules.
In addition to grandfathering, the government is also looking at allowing taxpayers to choose between the old and new LTCG regimes for real estate transactions.
Finance Minister Nirmala Sitharaman, in her budget speech on July 23, propsed the removal of indexation benefits from real estate and lowering the long-term capital gains (LTCG) rate from 20% to 12.5%.
In the 10 trading sessions since then, the Nifty Realty Index gained and declined for five sessions each.
Shares of Brigade Enterprises are the top gainers on the Nifty Realty index, gaining as much as 8% despite a weak operating performance during the June quarter.
Pre-sales for the April-June period fell by 10% and over 56% from the March quarter. Volumes also declined by 28% from last year.
Among other gainers on the real estate index include Prestige Estates and Godrej Properties, both of which are trading with gains of close to 5% each.