Indian Tax Rules Favor Real Estate Over Mutual Funds

Indian tax rules can make real estate look more attractive than mutual funds.

A person selling certain property may be able to avoid capital gains tax by keeping the money invested in real estate.

Another option is investing up to ₹50 lakh in certain approved bonds.

The money must stay in those bonds for five years to receive the tax benefit.

If the person uses neither option, a 12.5% long-term capital gains tax may apply.

For properties bought before 23 July 2024, an older 20% tax rate with indexation may be available.

The seller can choose the older option if it produces a lower tax bill.

The article argues that these different rules make the investment choices unequal.