Aam Aadmi Party MP Raghav Chadha slammed the Modi government in the Rajya Sabha on Thursday. Taking a dig at the tax system in the BJP-led NDA government, Chadha recited a poem in Parliament. Speaking in Hindi, Chadha said the government is imposing a tax on everything. "There is a tax on waking up, there is a tax on sleeping and crying. There is a tax on books and ink, on vegetables, cars, houses, and on buying and selling," he said.
Taking to microblogging platform X (formerly known as Twitter), the AAP MP credited himself for the partial restoration of indexation in the tax system for the real estate industry.
“I had explained the disadvantages of removing indexation. After listening to my speech, perhaps the Finance Minister took cognizance and partially restored indexation, which I welcome. But this alone will not suffice, the indexing must be fully restored,” Chadha posted on X.
Earlier, after the Union Budget, the AAP MP criticized the government's decision to remove the indexation benefit on the sale of old property. Chadha said the move will result in a huge inflow of black money in real estate, and investments in the sector will go down
Chadha asked the government to reverse the proposal, saying people would never be able to buy their “dream homes.”
"Restore indexation on long-term capital gains. Throughout the world, to woo investors to invest they are incentivised. In this country, by removing indexation we are disincentivising the investor class," he said, adding that removing indexation is not imposing tax but it is equivalent to "penalising investors".
He said as a result of the step proposed by Finance Minister Nirmala Sitharaman in the Budget 2024-25, individuals selling old properties will incur higher tax outgo.
"If you do not bring back indexation three things will happen in this country. First, investment in real estate will go down and people will never be able to buy their 'dream homes'," Chadha asserted.
Chadha further said property deals will be undervalued, people will buy properties at 'circle rates', and they will never disclose the real value of the property.
"Third, there will be a huge inflow of black money if you don't roll back this decision to withdraw indexation," he said.
It is important to note that in the Union Budget 2024-25, the government proposed reducing the long-term capital gains tax on immovable properties to 12.5% from 20%, but removed the indexation benefits to adjust for inflation.
