After FM Nirmala Sitharaman’s union budget speech, the nifty realty index led sectoral losers on 23rd July, with its stocks dropping by 2% to 6%, and they included DLF, Godrej Properties, as well as Prestige Estates.

Prestige Estates, DLF, and Godrej Properties are trading with losses of over 5%. In her budget speech, FM Sitharaman announced that the Long Term Capital Gains Tax (LTCG) on property sales was 12.5% from 20%.

The budget fine print indicates the removal of indexation benefits for property sales.

The new 12.5% LTCG tax rate removes indexation benefits under Section 48 for property, gold, and other unlisted assets. Removing indexation simplifies capital gains calculations for taxpayers and tax administration.

Indexation adjusts the purchase price for inflation, reducing taxable profits and thus lowering taxes. Without indexation, long-term capital gains and taxable income will be higher.

Real estate stocks are seeing profit booking after significant gains this year. The Nifty Realty Index has gained 35% in 2024.

Stocks like Sobha, Phoenix Mills, and Godrej Properties have gained 55% to 85% so far this year.

At 3:21 PM, the shares of DLF Ltd. were trading 2.69% lower at Rs 809.50 on BSE.

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