Author name: Yuvraj Vihol

nobody enjoys dealing with taxes. It’s stressful, complicated, and often feels like navigating a minefield blindfolded. But in recent years, the Indian tax authorities have fundamentally changed the landscape of that minefield, moving away from subjective assessments toward a regime of strict, technology-driven enforcement. The days of taking a “calculated risk” and hoping for leniency are largely behind us; today, a single misstep—whether intentional or accidental—can trigger a severe, mandatory Income Tax Penalty that can cripple a business’s finances. Let’s be honest: nobody enjoys dealing with taxes. It’s stressful, complicated, and often feels like navigating a minefield blindfolded. But in recent years, the Indian Income Tax Department has fundamentally changed the landscape of that minefield. The days of “taking a chance” and hoping for a lenient assessment officer are largely behind us. The government’s push towards a digital, transparent economy has coincided with a significantly tougher stance on tax evasion and procedural errors. The shift isn’t just about catching big fish; it’s about ensuring everyone—from salaried individuals to large corporations—adheres strictly to the rules. At the heart of this tougher stance is a revamped penalty regime, specifically spanning Sections 270A to 272B of the Income Tax Act, 1961. These aren’t just minor slaps on the wrist anymore. The new structures are objective, severe, and designed to make non-compliance prohibitively expensive. As a Chartered Accountant or a business owner, simply knowing the tax rates isn’t enough. You need to understand the consequences of getting it wrong. In this comprehensive guide, we are going to strip away the legal jargon and look at the real-world implications of these penalty updates. We will explore why the system changed, analyze the massive difference between “under-reporting” and “misreporting,” and provide a roadmap to keep you on the right side of the law. This is the true cost of non-compliance. The Paradigm Shift: From Discretion to Mandatory Penalties To understand where we are now, we have to look at where we came from. Before the introduction of Section 270A (which replaced the infamous Section 271(1)(c)), the penalty regime was murky. Under the old laws, penalties were often levied for “concealment of income” or “furnishing inaccurate particulars.” The problem? These terms were subjective. It often came down to the Assessing Officer’s discretion to decide if an error was an honest mistake or deliberate fraud. This led to endless litigation, uncertainty for taxpayers, and allegations of harassment. The new regime, spearheaded by Section 270A, aims to remove that subjectivity. The government’s message is clear: If there is a difference between what you declared and what we assessed, a penalty is almost automatic unless you fall into very specific exceptions. The focus has shifted from proving “mens rea” (guilty mind) to objectively proving “under-reporting.” This shift is crucial. It means you can no longer rely just on the argument that “I didn’t mean to.” If the numbers don’t add up according to the new rules, you are facing a statutory penalty. The Elephant in the Room: Section 270A (Penalty for Under-reporting and Misreporting) Section 270A is the cornerstone of the current penalty structure. It is the section that keeps tax practitioners awake at night. It draws a sharp, expensive line between two concepts: Under-reporting of income and Misreporting of income. Understanding this distinction is the single most important thing you can do to protect yourself from massive fines. What constitutes “Under-reporting” of Income? In simple human terms, under-reporting happens when the income assessed by the tax department is higher than the income you returned. It’s the gap between your version of reality and theirs. The law defines several scenarios that automatically qualify as under-reporting: The Penalty for Under-reporting: If you are caught under-reporting, the penalty is 50% of the tax payable on that under-reported income. Think about that. It’s not 50% of the income; it’s 50% of the tax on that income. If you are in the 30% bracket, and you under-reported ₹10 Lakhs, the tax is ₹3 Lakhs (approx, ignoring cess/surcharge for simplicity). The penalty is an additional ₹1.5 Lakhs. The “Safety Valve” – Exceptions to Under-reporting Is every difference in opinion a penalty? Fortunately, no. The law recognizes that genuine differences in interpretation exist. You will not be penalized for under-reporting if you fall into these specific categories (often called the “bonafide” explanations): The key takeaway here is documentation. If you take a controversial tax position, document why you took it. If you can prove you were transparent, even if you were wrong, you might avoid the 50% hit. The Danger Zone: “Misreporting” of Income If under-reporting is a stumble, misreporting is a deliberate head-dive into non-compliance. This is where the department takes off the gloves. Misreporting is essentially aggravated under-reporting. It implies intent, deceit, or gross negligence. Section 270A specifically lists scenarios that constitute misreporting: The Cost of Misreporting: If your under-reporting is classified as misreporting, the penalty quadruples. It becomes 200% of the tax payable on the misreported income. Let’s go back to our previous example. You didn’t just forget to include ₹10 Lakhs; you actively created fake invoices to hide it. Almost the entire amount is wiped out. This is designed to be confiscatory. It is meant to ensure that evasion is never a profitable strategy. The Escape Route: Immunity under Section 270AA Is there a way out once facing a 270A order? Yes, but it comes with conditions. Section 270AA offers an olive branch. A taxpayer can apply to the Assessing Officer to grant immunity from imposition of penalty under section 270A (only for under-reporting, not misreporting) and also immunity from prosecution. To get this immunity, you must: Essentially, you have to accept the department’s findings, pay up immediately, and promise not to fight it. In return, they waive the 50% penalty and agree not to prosecute you criminally. It’s a settlement mechanism to reduce litigation. It’s a tough pill to swallow, but often better than a long, expensive legal battle you might lose anyway. Beyond 270A: The Procedural Minefield (Sections 271-272B)

You are sitting in your office, sipping coffee, perhaps looking over your quarterly sales figures. Then, the email arrives. A Notice in Form GST ASMT-10, or worse, a notification for a full-fledged departmental audit under Section 65. Your heart sinks. You’ve been compliant—mostly. You’ve filed your GSTR-1s and 3Bs on time. But deep down, you know the game has changed. The days when a GST officer manually sifted through piles of paper invoices are ancient history. Today, the “officer” reviewing your file isn’t a person; it’s a sophisticated Artificial Intelligence (AI) and Machine Learning (ML) system running on the massive servers of the Goods and Services Tax Network (GSTN). If you think I’m exaggerating about 2026, look around you today. The Directorate General of Analytics and Risk Management (DGARM) is already heavily relying on data tools to send out scrutiny notices. By 2026, this system won’t just be auxiliary; it will be the primary driver of GST compliance. The human officer will merely be the executor of the AI’s findings. The question isn’t “Will I be audited?” It’s “What specific data pattern in my filings will trigger the AI to flag me?” In this comprehensive guide, we are going to step inside the “brain” of the tax department’s digital machinery. We will explore the sophisticated GST Audit Triggers in 2026 and uncover exactly what red flags the Department’s AI is looking for now to ensure you aren’t caught off guard. The Great Shift: From Random Selection to “Surgery by Data” To understand the future, we have to appreciate how quickly things changed. In the early days of GST (circa 2017-2019), audits were often based on random sampling or very obvious blunders—like not filing returns at all. But the government realized that random audits are inefficient. They waste manpower on compliant taxpayers while letting sophisticated evaders slip through. The Rise of “Project Insight” and Beyond The shift began with initiatives like Project Insight (Income Tax) and the bolstering of DGARM for GST. The goal was simple: Total Information Awareness. By 2026, the Indian tax ecosystem has achieved near-perfect data interoperability. The GSTN is no longer an island. It is digitally fused with: How the 2026 AI Actually “Thinks” The AI doesn’t just look for A + B ≠ C. That’s too simple. It looks for patterns and anomalies. It builds a “risk profile” for every single GSTIN in the country. Think of it like a credit score, but for tax compliance. Every month you file a return, generate an e-invoice, or move goods, your score is updated. If your score dips below a certain threshold, or if a specific transaction triggers a high-risk flag, you are automatically queued for scrutiny. The AI is looking for behaviors that deviate from the “norm”—your historical norm, your sector’s norm, and your geographical norm. The Core GST Audit Triggers in 2026: A Deep Dive into the AI’s Targets By 2026, the department’s AI has moved beyond basic arithmetical checks. It is now performing forensic-level data analysis across thousands of data points simultaneously. Here is a detailed breakdown of the red flags it is hunting for. 1. The “Golden Triangle” of Mismatches (Turnover & Liability) This remains the foundation of automated scrutiny, but by 2026, the comparison is far more granular. The GSTR-1 vs. GSTR-3B vs. E-Way Bill Matrix In the past, a slight difference between GSTR-1 (sales declared) and GSTR-3B (tax paid) might have been ignored. In 2026, the tolerance level is effectively zero. The AI now triangulates this data with E-Way Bills. If you have generated E-Way bills for ₹50 Lakhs in a month, but your GSTR-1 only shows sales of ₹30 Lakhs, this is an immediate, high-priority red flag. The AI assumes you moved goods without declaring the sale to avoid tax. Furthermore, it checks for timing differences. If E-Way bills are generated near month-end, but the sales appear in the next month’s GSTR-3B, the system flags this as a potential deferment of liability. The Income Tax vs. GST Turnover Trap This is where many businesses get caught. The AI automatically fetches the turnover declared in your latest Income Tax Return (ITR) (say, Tax Audit Report Form 3CD) and compares it with the cumulative turnover declared in your GSTR-9 (Annual Return) for the same financial year. The system is smart enough to adjust for non-GST turnover (like interest income). If, after adjustments, there’s a significant variance—for example, your ITR shows substantially higher revenue than your GST returns—you can guarantee an audit notice asking you to reconcile the difference. The assumption is suppressed sales in GST to avoid tax. 2. The Input Tax Credit (ITC) Minefield ITC frauds have been the biggest headache for the government, and consequently, this is where the AI’s algorithms are most aggressive in 2026. The GSTR-2B vs. GSTR-3B Hard Stop The rule that you can only avail ITC that appears in your GSTR-2B (generated from your suppliers’ GSTR-1/IFF) is absolute in 2026. The AI immediately flags any taxpayer whose ITC claimed in GSTR-3B exceeds the eligible ITC available in GSTR-2B by even a single rupee. The system doesn’t care about your “genuine mistakes” or supplier delays. It sees a math error that favors the taxpayer, and it flags it. Detecting “Fake Invoice” Networks (Circular Trading) This is perhaps the most sophisticated capability of the 2026 AI. It uses Network Analysis and graph theory to spot circular trading. How does it work? Imagine Company A issues an invoice to Company B without goods. B issues to C, and C issues back to A. On paper, everyone has sales and purchases, and they are passing on ITC. The human eye can’t easily see this across thousands of transactions. The AI, however, maps out the relationship linkages. It sees that goods are moving in a circle, prices are inflated at each step to generate fake credit, and there is no actual value addition. If your business is unfortunate enough to buy from a vendor who is part of such a flagged

The Chief Financial Officer who believes their job is to simply close the books, manage budgets, and report on last quarter’s history is a relic. That CFO is not just outdated; they are a liability. We are in a new age. The finance function is no longer the quiet back office; it is the strategic nerve center of the entire enterprise. Today’s CFO is fighting a war on three fronts, each one capable of fundamentally making or breaking the company: To survive this, the CFO must evolve. To thrive, they must transform. The future-proof CFO is not just a financial expert. They are an integrator, a strategist, a technologist, and a communicator. They have traded their green eyeshade for a crystal ball—one powered by data. Based on this new reality, three core, non-negotiable skills have emerged. This isn’t about knowing Excel better. It’s about a fundamental redefinition of the role. The future-proof CFO must become a Strategic Technologist, an Integrated Value Champion, and a Proactive Risk Navigator. Let’s break down exactly what these are and how to build them. Core Skill 1: The Strategic Technologist & Data Savant The first and most immediate disruption is Artificial Intelligence. For decades, CFOs have been the primary consumers of data. Now, they must become the primary strategists for how data and AI create value. The CFO who delegates all “tech” to the CIO is already ten steps behind. Why? Because AI’s impact is threefold: it automates the mundane, predicts the future, and uncovers new risks. Beyond Automation: From Historical Reporter to Predictive Strategist The first wave of AI in finance was simple automation: robotic process automation (RPA) for accounts payable, automated journal entries, and faster reconciliations. This was about efficiency—doing the same things, just faster. Generative AI and advanced machine learning are about effectiveness. They are about doing entirely new things. The old CFO reported what happened. The new CFO uses AI to predict what will happen and model what we should do about it. Mastering the New AI Toolkit The future-proof CFO doesn’t need to code in Python, but they must be “conversationally fluent” in the technology that powers their function. This includes: The strategic CFO leverages these tools to change the conversation. The boardroom question stops being, “Are the numbers right?” and becomes, “What are the numbers telling us to do next?” The New Power Duo: Forging a Strategic Alliance with the CIO For years, the CFO-CIO relationship was often transactional, even adversarial. The CIO wanted a bigger budget for new tech; the CFO wanted to cut costs. That dynamic is now a recipe for failure. In the age of AI, the CFO and CIO must be the tightest strategic partners in the C-suite. Their relationship is no longer “requestor and provider”; it is “co-leader and co-strategist.” Why This Alliance is Non-Negotiable Quantifying the Unquantifiable: The CFO’s Role in AI ROI and Risk As the financial steward, the CFO is uniquely positioned to answer the two questions everyone on the board is asking: “How much will this AI cost?” and “What is the risk?” Calculating the True ROI of AI This is harder than it looks. The “cost” side is easy to see (software licenses, cloud computing, talent). The “return” side is often hidden. A human-centric CFO must look beyond simple headcount reduction (which is a low-value way to think about AI). The real ROI is in: The future-proof CFO builds the models that capture this holistic value, justifying AI as a strategic growth engine, not a simple cost-cutting tool. Managing the New Frontier of AI Risk With great power comes great risk. The CFO’s domain of risk management just exploded. The future-proof CFO doesn’t block AI out of fear. They become the “moral compass” and “chief risk officer” for its implementation, working with the CIO and legal teams to establish robust ethical guidelines, validation processes, and human-in-the-loop controls. Core Skill 2: The Integrated Value Champion (Holistic Strategist) The second front in the CFO’s new war is ESG. For a long time, this was seen as “fluffy” stuff—the domain of the marketing or corporate responsibility departments. Not anymore. Investors, regulators, and a new generation of talent are all demanding one thing: proof that a company’s value is more than just its quarterly earnings per share. And who is the master of measuring, validating, and reporting value? The CFO. This is why ESG has landed, with a thud, on the CFO’s desk. The future-proof CFO must evolve from being a Chief Financial Officer to a Chief Value Officer, responsible for stewarding and communicating the company’s total value, both financial and non-financial. ESG is the New Financial Reporting Why the CFO? Because the market is tired of “greenwashing”—vague, self-congratulatory sustainability reports with no teeth. The market is demanding that ESG data have the same rigor, auditability, and reliability as financial data. Stakeholders want to see the “E,” “S,” and “G” on the same level as “Revenue,” “Cost of Goods Sold,” and “Net Income.” This is, fundamentally, a finance function. It requires: The CFO is the only executive with the DNA and a “what gets measured gets managed” mindset to impose this financial-grade discipline on a set of non-financial metrics. The ‘E,’ ‘S,’ and ‘G’ of Financial Materiality The strategic CFO’s job isn’t just to report ESG numbers. It’s to understand how they drive the financial numbers. They must be the one to connect the “fluffy” to the “P&L.” This is about financial materiality—identifying which ESG factors have a direct, tangible impact on business performance. The ‘E’ (Environmental) as a Financial Risk This is the most obvious link. The CFO must now be the one to model: The ‘S’ (Social) as a Driver of Growth This has long been considered an “HR issue,” but the future-proof CFO sees it as a primary driver of the P&L. The ‘G’ (Governance) as the Bedrock of Trust This has always been in the CFO’s wheelhouse, but the lens is wider now. Speaking the Language of Stakeholders:

If you’re an online seller in India, you’ve probably looked at your payment statement from Amazon, Flipkart, or another marketplace and felt a pang of confusion. You made a sale for ₹1,000, but the amount credited to your bank account is noticeably less. You see lines for “commission,” “fees,” and then, two more confusing deductions: TDS and TCS. (TDS TCS rules for e-commerce) For many sellers, this feels like a “double tax.” Why is money being taken out for two different things on the same sale? You are not alone. This is the single biggest point of confusion for India’s booming e-commerce community. With the introduction of the new Direct Tax Code (DTC) 2025 and other GST updates, these rules are now a permanent part of doing business. The good news? It’s not a double tax. But it is a double compliance-and-cash-flow problem. This guide will simply and clearly explain both tax systems. We will demystify the new TDS/TCS rules for e-commerce, show you what’s new in 2025, and most importantly, tell you exactly how to claim all this deducted money back. The Big Confusion: Why Am I Being Taxed Twice on One Sale? (TDS vs. TCS) The primary reason for the confusion is simple: you are being subjected to two completely separate laws handled by two different government departments. Think of it this way: The e-commerce platform (like Amazon) is required by law to act as a collection agent for both the Income Tax department and the GST department. Meet Your Two Tax Collectors: The Income Tax Act and the GST Act A Simple Table: TDS (194-O) vs. TCS (Sec 52) at a Glance Here is the simplest breakdown of the two systems. Feature TDS (Income Tax) TCS (GST) The Law Section 194-O of the Income Tax Act Section 52 of the CGST Act The Purpose An advance on your annual income tax A credit against your monthly GST liability The Rate 1% 1% (0.5% CGST + 0.5% SGST) Calculated On? Gross Sales Value (The total value of your sale) Net Taxable Sales Value (Gross value minus sales returns) How to Claim? As a credit in your Annual Income Tax Return (ITR). As a credit in your Monthly GSTR-3B (from GSTR-2B) Where to See It? In your Form 26AS or Annual Information Statement (AIS) In your Electronic Cash Ledger on the GST Portal Now that you understand the “what” and “why,” let’s dive into the specific rules for each. Part 1: TDS Under the New Tax Code (DTC 2025) – The Income Tax Rule This is the first tax you see deducted, and it’s governed by the Income Tax Act. The specific law you need to know is Section 194-O. Let’s break down exactly what this is, what’s new for 2025, and how it impacts you. What is Section 194-O? A Simple Definition for Sellers Section 194-O is a rule that makes your e-commerce platform (the “Operator”) responsible for deducting your income tax in advance. Who Deducts This Tax? (The E-Commerce Operator) The tax is deducted by the “e-commerce operator.” This is the company that owns, operates, or manages the digital platform. What is the Rate? The BIG Change for 2025 This is the most important update for 2025 and a key part of the new tax code’s framework. The new TDS rate under Section 194-O is 0.1%. This rate was reduced from the old 1% to bring parity with offline business transactions (under Section 194Q). This new, lower rate is the standard for the 2025 tax year. This 0.1% is calculated on the “gross amount of sales.” This means the total value of the sale, including shipping or other fees, but excluding the GST component. The ₹5 Lakh Exemption: Do You Qualify? The law provides a crucial exemption for small sellers. Your e-commerce operator is not required to deduct any TDS if you meet all of the following conditions: Practical Example: What’s “New” in 2025? (Stability and Integration into the DTC) For online sellers, the “New Tax Code 2025” (Direct Tax Code) isn’t about introducing a brand new, scary rule. It’s about formalizing and stabilizing the rules that were already in motion. The two key takeaways for 2025 are: Where to Find Your TDS Credit (Form 26AS & the AIS) This is the most important part: how to get your money back. The 0.1% deducted by Amazon or Flipkart is not lost. It’s your money, held by the government. You can see this “tax credit” in two places on the Income Tax Portal: When you (or your Chartered Accountant) file your Income Tax Return (ITR) at the end of the year, you will: If the TDS credit is more than your total tax bill, you will receive a tax refund. Part 2: TCS Under the GST Act – The Goods & Services Tax Rule Now we come to the second deduction you see on your statements: TCS. This one has nothing to do with your annual income tax and everything to do with your monthly GST compliance. If TDS (Section 194-O) is the Income Tax department’s way of getting an “advance” on your yearly income, TCS (Section 52) is the GST department’s way of creating a “digital trail” to ensure every sale is accounted for in your monthly GST returns. What is Section 52 of the CGST Act? A Simple Definition Section 52 of the Central Goods and Services Tax (CGST) Act is a rule that requires e-commerce operators (Amazon, Flipkart, etc.) to collect a small percentage of tax from your sales and deposit it with the government. Who Collects This Tax? (Again, the E-Commerce Operator) Just like TDS, this is collected by the e-commerce operator (Amazon, Myntra, etc.). They are legally required to file a monthly return called GSTR-8, where they report the total sales and TCS collected for every single seller on their platform, identified by their GSTIN. This GSTR-8 filing is what makes the magic happen. The moment your platform files its GSTR-8, the

If you’re an investor in India, you’ve probably felt a sense of confusion lately. You hear whispers of a “New Direct Tax Code.” You see headlines about “Finance Act 2024” and an “Income Tax Bill 2025.” You might have even heard that “Assessment Year” is on its way out. Meanwhile, all you want to know is: “When I sell my stocks, property, or gold, how much tax will I actually have to pay?” Let’s be clear: the confusion is real, but so are the changes. India’s tax system is in the middle of its most significant overhaul in over 60 years. The government is slowly dismantling the complex, litigation-prone Income Tax Act of 1961. But it’s not doing it all at once. There is no single “D-Day” where the old law dies and the new one is born. Instead, the “New Direct Tax Code” (DTC) is a process. It started with a task force report in 2019, and its key ideas are being implemented in phases, most notably through the recent Finance (No. 2) Act, 2024, and the proposed Income Tax Bill, 2025. For you, the investor, this means two things: This article is your definitive guide to navigating this new reality. We will untangle the proposals from the enacted laws and show you exactly what has changed for your portfolio—and what to watch out for next. The End of an Era: Goodbye “Assessment Year,” Hello “Tax Year” Before we dive into tax rates, we have to address a foundational change. It’s one you’ve likely seen in your ITR forms and dreaded: the confusion between “Previous Year” and “Assessment Year.” The Classic Confusion: What Was the “Previous Year” vs. “Assessment Year”? For decades, India’s tax system operated on a strange time-delay. For a Chartered Accountant, this made sense. For everyone else, it was a constant source of error. Did “AY 2025-26” mean the income you earned in 2025? Or the return you filed in 2025? This simple, unnecessary complexity was a hallmark of the old 1961 Act. Introducing the “Tax Year”: A Simple, Global Standard The new Income Tax Bill 2025, which forms the basis of the new code, scraps this. It introduces a single, globally understood concept: the “Tax Year.” It’s beautifully simple: How This Small Change Simplifies Life for Salaried Investors and Businesses This isn’t just a name change; it’s a philosophy. It signals a move away from a system designed by lawyers for accountants to one designed for the user. For you as an investor, this means: With that foundational cleanup out of the way, let’s get to the money: the tax on your profits. ALREADY ACTIVE: The Capital Gains Changes from the Finance Act 2024 This is the most critical section of this article. The changes below are not proposals. They are law. The Finance (No. 2) Act of 2024, a major step in implementing the new tax code’s goals, has already altered how your capital gains are calculated. Simplification of Holding Periods: The New 12/24 Month Rule The old regime was a mess of timelines. Was an asset long-term after 12 months? 24 months? Or 36 months? It depended on the asset. This created bizarre situations where your gold ETF was “long-term” after 36 months, but a stock was “long-term” after 12. The new law has simplified this dramatically, moving to a two-tier system: This is a massive change. The 36-month category is gone. Impact: How Gold, Debt Funds, and Reits Classifications Have Changed This simplification has immediate, practical consequences for your portfolio: This is a direct benefit for investors in these assets, allowing you to access long-term status (and its new tax rate) a full year earlier. The Great Indexation Debate: The New 12.5% Flat Rate This is the change that has the entire investment community talking. The Finance Act 2024, in its quest for simplification, has fundamentally altered the trade-off between inflation and taxes. To understand the impact, you first need to appreciate the system we just left behind. Explaining the Old System: 20% with Indexation For decades, the tax law was designed to be “fair” by not taxing “phantom profits.” Phantom profits are the gains you make purely from inflation, not from a real increase in the asset’s value. To prevent this, the government gave investors the benefit of “indexation.” Here’s how it worked: This system was fair but complex. It required you to look up CII tables, perform calculations, and keep old records. Explaining the New System: 12.5% without Indexation The new system, effective for sales from July 23, 2024, scraps this entirely for most assets. The new philosophy is simplicity over precision. The government has made a new deal with you: “We will remove the complex indexation calculation. In exchange, we are slashing the tax rate from 20% down to a flat 12.5%.” Let’s re-run that same property sale under the new rules (assuming you bought it after July 2024): Who wins? Who loses? This new 12.5% rate without indexation is now the standard for long-term gains on debt funds, gold, unlisted shares, and more. However, the government knew this change would be catastrophic for one specific sector: Real Estate. The Critical Exception: How Land & Buildings Are Still Treated The pushback on removing indexation for property—where holding periods span decades—was immediate and intense. A person who bought a house in 1995 would face a crippling tax bill. In response, the government introduced a vital “grandfathering” clause that gives a choice to individuals and HUFs (Hindu Undivided Families): If you acquired your property (land or building) before July 23, 2024, you get to CHOOSE. When you sell this property, your tax advisor will calculate your tax liability in two ways: You are legally allowed to choose whichever option results in a lower tax payment. This is the best of both worlds and a massive relief for all existing property owners. For any property you buy on or after July 23, 2024, this option does not exist. You will fall