According to the new guidelines, individuals who acquired real estate before 2001 can now calculate their LTCG using the fair market value (FMV) of the property as of April 1, 2001, instead of the original purchase price. This adjustment is intended to provide a more accurate reflection of the property's current value and ensure a fair calculation of capital gains.

The FMV of the property as of April 1, 2001, is considered as the cost of acquisition for the purpose of computing LTCG. This means that property owners who sell real estate bought before 2001 will benefit from a higher base value, potentially reducing their capital gains tax liability.

This clarification is expected to have a significant impact on property transactions and tax filings. It simplifies the process for calculating capital gains for properties held over long periods, aligning with current market conditions and providing relief to taxpayers who have held assets for extended durations.

The updated rules are part of broader efforts to streamline tax regulations and enhance transparency in capital gains calculations. Property owners and investors are encouraged to review the new guidelines and consult with tax professionals to ensure accurate compliance with the revised rules.

Overall, the I-T Department's clarification on LTCG calculations offers valuable guidance for managing real estate investments and planning tax liabilities effectively.