The Finance Bill passed by the Lok Sabha modifies the LTCG tax provision on immovable properties.

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Why in the news?

The central government loosened the recently implemented new capital gains tax on real estate, giving taxpayers the choice to migrate to a new, lower tax rate or continue with the previous system, which had a higher rate with indexation advantage. On Wednesday, the Lok Sabha passed the Finance Bill 2024.

In her 2024–2025 budget address, Union Finance Minister Nirmala Sitharaman suggested reducing the long-term capital gains tax on real estate from 20% to 12.5%, although she did not include the indexation benefit. She proposed a bill change today to include the option.

The new provision was criticized for increasing tax incidence and discouraging real estate investment, which led to the revision.

Indexation benefit:

The primary modification in the bill pertains to the reinstatement of the indexation benefit for properties sold before July 23, 2024.

What does the New amendment say ?

Now, under the new scheme, individuals or HuFs who bought residences before July 23, 2024, have the option to pay LTCG tax at a rate of 12.5% without indexation or to receive the indexation advantage and pay 20% tax.

Afterwards, the Lower House voted by voice to accept the bill with 45 official modifications.

Sitharaman on middle class taxation:

Sitharaman added that encouraging investment and helping the middle class were the goals of the FY25 Budget plans.

According to her, middle-class investors in the stock market will profit from the increase in the tax exemption ceiling on long-term capital gains in listed stocks and bonds to Rs 1.25 lakh from Rs 1 lakh.

She claimed that without significantly raising taxes, the Modi administration has eased compliance and implemented a more straightforward tax system. She continued by saying that the removal of customs duties on a variety of items will encourage investment and trade as well as create jobs.

Bill to be referred to Rajya Sabha now:

The Rajya Sabha will now debate the Finance measure 2024, although the Constitution does not provide the Upper House the authority to reject a money measure. Only such bills may be returned, and the law is deemed authorized if they fail to do so within the allotted 14 days.

In response to calls for the elimination of the GST on life and health insurance premiums, Sitharaman stated that the states receive 75% of the GST collected.

All states used to tax insurance premiums before imposing an 18% GST on health insurance (premium). According to Sitharaman, the tax was consequently automatically incorporated into GST when it was implemented.

India briefly evacuates non-essential staff and families of politicians from Dhaka to Bangladesh In the wake of the violence

India on Wednesday evacuated "non-essential" staff and The families of the politicians have been called back. This decision has been taken voluntarily and by commercial flights. However, the Indian High Commission in Dhaka and Consulates in Chittagong, Rajshahi, Khulna and Sylhet remain operational.

Three Key Points

Why is this in the news?

Due to the ongoing violence and protests in Bangladesh, India has withdrawn from its High Commission in Dhaka. It has been decided to recall non-essential staff and families of politicians. This ensures security in the face of the spread of violent incidents and changes in the political situation.

Key Points:

India has voluntarily recalled non-essential staff and political families.

The Indian High Commission is fully functional in Dhaka.

The staff and Rajnayak family are returning by commercial flights.

Bangladesh Prime Minister Sheikh Hasina also had to leave the country and come to India due to violent protests.

Indian states have issued special helpline numbers for assistance.

Background:

Violent protests are not new in Bangladesh given its political instability. Historically, there have been several political crises in Bangladesh after the assassination of Sheikh Mujibur Rahman in 1975. Moments of violence have been witnessed. Due to this violence, major changes are taking place in political management, due to which Rajnayak and Safety of families has become a priority.

Result:

Given the current violence and political situation in Bangladesh, it is high time that all countries in the world should re-examine their security plans and we need to see how India and other countries act in this situation.

India needs to keep its citizens safe and those whose condition is critical. Special plans should be prepared to provide assistance.

To analyze and put forward relief plans to deal with the local political situation and instability.

Need:

It should be ensured that full preparation is done to deal with such situations in future. International cooperation is needed to bring political stability in Bangladesh. With this, the welfare and safety of the local people can be ensured.