Realty Stocks See Sharp Rebound a Day After Budget-Led Selloff, Surge Up To 8%
Just one day after these counters saw a decline due to Finance Minister Nirmala Sitharaman’s proposal to eliminate the indexation benefit when calculating long-term capital gains tax (LTCG) on real estate, shares of realty companies staged a sharp rebound on July 24, rising as high as 8 percent intraday.
Macrotech Developers had a 1.1% increase in shares, Sobha saw a 3.1% increase, Prestige Estates saw a 5.4% increase, Ajmera Realty saw a 2.8% increase, DLF saw a 2% increase, and Oberoi Realty saw a 3.4% increase.
The benefit of indexation modifies the asset’s acquisition price to account for inflation. This raises the purchase price and lowers the capital gain at the time of sale, possibly lowering or even eliminating the tax obligation. The gain is computed on the purchase price in the absence of indexation.
Real estate stocks saw heavy selling on July 23 in response to the proposal, with well-known companies like Godrej Properties and Prestige Estates falling as much as 5% intraday.
