If you are planning to sell your property, you’ll have to pay capital gain tax on the profit earned after considering the inflation and indexed cost of acquisition. If you’re selling a property in India, the profits you earn are called Capital Gains.
Gain can be Short Term or Long Term
STCG = If sold within 24 months
LTCG = If sold after 24 months
STCG Tax = As per slab rates
No exemption available on STCG tax
LTCG Tax = 20% with indexation benefit
LTCG
4 cr – 1 cr = 3 cr
4 cr – 3.17 cr = 83 lacs
2 ways to save LTCG tax
- Invest in other residential property
- Condition 1 – Invest within 2 years after or 1 year prior
- Condition 2 – Can invest only in 1 property
- Condition 3 – Can not sell this property for next 3 years
Deposit LTCG amount in Capital Gains account before filing your returns
2. Invest in Specified Bonds
NHAI bonds or REC Bonds
- Condition 1 – Invest within 6 months
- Condition 2 – Max investment allowed is 50 lacs
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Disclaimer: The information shared in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice before you take any/refrain from any action. Tax benefits are subject to changes in tax laws. Please contact your tax consultant for an exact calculation of your tax liabilities. All the views expressed in the article are solely of the writer and the company in no way endorses them or is related to them.