Property stocks were trading lower on Tuesday after the budget fine-print showed the removal of indexation benefits.

What Happened: In her budget speech, Finance Minister Nirmala Sitharaman announced a reduction in the long term capital gains tax (LTCG) on the sale of homes and land from 20% to 12.5%. While that would've been a cause for celebration, the budget document showed indexation benefits that are associated with the sale of a property have been snatched away.

“With the rationalisation of rate to 12.5%, indexation available under second proviso to Section 48 is proposed to be removed for calculation of any long-term capital gains, which is presently available for property, gold and other unlisted assets," the document said.

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Indexation adjusts the asset's purchase price for inflation. When an asset is sold, a higher purchase price reduces capital gain, which can lower the tax bill. Without indexation, the gain is calculated based on the original purchase price, which could result in higher taxes.

The adjustments to capital gains announced in the Union Budget are set to take effect from Tuesday.

Renowned investor D Muthukrishnan expressed his concerns over the recent changes, calling it a "disastrous budget", in a post on micro-blogging platform X, formerly Twitter.

Price Action: Near the end of trade on Tuesday, DLF was trading 3.23% lower at ₹805. Brigade Enterprises lost 2.46% to trade at ₹1,223.80. Godrej Properties was down 2.47% at ₹3,162.05.

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