Ratan Tata: From unlikely heir to architect of Tata group’s global legacy

World’s most influential industrialist Ratan Tata passes away at 86

After his appointment as the chairman of Tata Sons in 1991, Tata’s philanthropic efforts gained new momentum

According to him, efforts are being to ensure that aircraft manufacturing activities can start in the next five years, he said

The government will set up a special purpose vehicle to push ahead with plans to start manufacturing commercial aircraft in India, Civil Aviation Minister K Rammohan Naidu said on Wednesday as he highlighted the potential of the country’s fast-growing aviation sector.

The Bhartiya Vayuyan Vidheyak Bill 2024, which was passed by the Lok Sabha in August, includes provisions to regulate the design and manufacturing of aircraft, supporting the Aatmanirbhar Bharat initiative for self-reliance.

“The government is strongly pushing the idea of India manufacturing its own planes,” Naidu said, adding that a special purpose vehicle will be set up with industry stakeholders and others.

According to him, efforts are being to ensure that aircraft manufacturing activities can start in the next five years, he said.

“We want to be a big player for manufacturing planes and also export them,” Naidu said.

India is a key market for aircraft manufacturers – Boeing and Airbus.

New regime may take effect only from FY26; cut-off date for removal of indexation benefit may be advanced.

The government is considering measures to address concerns regarding the Budget proposal to revise the taxation of long-term capital gains (LTCG) from real estate transactions. Sources familiar with the deliberations indicate that the new LTCG regime could be effective from April 1 next year, instead of the proposed July 23, 2024. Additionally, the government may retain the option of indexation benefit in the new regime or change the cut-off date for the removal of indexation from April 1, 2001, to a later date.

These potential changes could be implemented through an amendment to the Finance Bill 2024 when it is taken up by the Lok Sabha this week. However, the government plans to stick to the new LTCG tax rate of 12.5%.

Indexation is designed to adjust gains from property sales by accounting for inflation during the ownership period, using the cost price index for calculations. In the Budget 2024-25, Finance Minister Nirmala Sitharaman proposed reducing the LTCG tax rate to 12.5% from 20% for property and other unlisted assets. The proposed regime would scrap the indexation benefit for properties purchased on or after April 1, 2001.

This proposal has led to concerns that post-tax gains from property sales could decrease, potentially reducing demand for real estate units and transactions. However, government officials and independent experts argue that the new regime may not increase tax outgo for property sellers in all cases. For properties appreciating at high rates, especially in metro cities, the new regime could be more beneficial to taxpayers.

In a post on ‘X’ on July 24, the Income Tax Department stated that nominal real estate returns are generally in the range of 12-16% per annum, significantly higher than inflation. Indexation for inflation is around 4-5%, depending on the holding period, leading to substantial tax savings for many taxpayers.

“Now, there is an appreciation of the fact that nominal real estate returns are not in the range of 12-16% in general and in all places. Factoring in this, some relief may be given,” an official said.

“While considering some relief, a fine balance has to be worked out so that the government does not lose substantially and taxpayers also benefit. It is being examined if indexation can be offered as an option and if so, how it could be structured,” the official added.

Analysts have also suggested ways to fine-tune the new regime. Shalini Mathur, Director, Tax and Economic Policy Group, EY India, proposed, “Where long-term capital gain is limited vis-à-vis inflation, taxpayers may be given the option to choose between the old regime of 20% LTCG tax rate with indexation benefit or the new regime of 12.5% LTCG rate without indexation.”