India’s Real Estate stocks, from Godrej Properties, to Macrotech and Prestige Estates are poised for a recovery on Tuesday after the government confirmed a CNBC-TV18 newsbreak after moving an amendment to the Finance Bill to provide relief to the sector.

The government is set to allow taxpayers to avail either a lower rate of 12.5% without indexation or a higher rate of 20% with indexation, if the concerned property is acquired prior to July 23, 2024.

“In the case of transfer of a long-term capital asset, being land or building or both, by an individual or HUF, which is acquired before the 23rd day of July, 2024, the taxpayer can compute his taxes under the new scheme [@12.5% without indexation] and old scheme [@20% with indexation] and pay such tax which is lower of the two.”

Here’s how the Real Estate stocks, including the Nifty Realty Index have moved since the budget speech:

Real Estate Stocks / Index	Returns Since July 23, 2024
Nifty Realty	-9%
Godrej Properties	-10%
Brigade Enterprises	-8%
Macrotech Developers	-17%
Prestige Estates	-8%
Sunteck Realty	-9%
Mahindra Lifespaces	-7%
Phoenix Mills	-12%
Sobha	-2.50%
Oberoi Realty	-1.60%
DLF	-1%

Most of these stocks are down between 10% and 15% since the Union Budget was presented. The stocks fell after Finance Minister Nirmala Sitharaman in her budget speech announced a cut in Long Term Capital Gains Tax (LTCG) on the sale of property from 20% to 12.5%.

However, the budget fineprint disclosed the removal of the indexation benefits that are associated with the sale of a property.

Indexation adjusts the purchase price of an asset for inflation, thereby reducing the gains and ultimately the tax liability.

CNBC-TV18 was the first to report about proposals being made to North Block to provide some relief to the sector on July 31, followed by another newsbreak on August 6 about the proposed amendment.

The Real Estate Index saw an upmove on Tuesday but fell from the highs of the day to end with gains of just under 1%. The index has risen 27% so far in 2024.