Dear Anand,
It will have an affect (mostly positive) on investments where indexation benefit is available when calculating Capital gain taxes.
For ex, on Debt mutual fund long term capital gains or LTCG on property sale etc.,
Wont affect your PPF savings, as the interest income is tax-exempt.
Suppose you are holding on to your investments made in debt funds before 2001. The Fair Market Value (NAV) as on 1 st April, 2001 will be considered as cost of acquisition for calculating capital gains. This will help the investor to reduce the capital gains taxes
As of now, the base year is 1981. To calculate the capital gains at the time of selling any property purchased before 1981, its purchase price is now calculated on the basis of the fair market value of 1981. Calculation at the fair market value of 2001 will increase the cost of acquisition and lower the capital gain.
Please login or Register to submit your answer