Indians also purchase and sell real estate as investments. People in this circumstance make money on the property and sell it as well. Selling a house for a profit is a significant choice, though. The house sale is also subject to tax, though. Profits may be affected in this case if the tax impact is not managed effectively. According to Income Tax regulations, depending on the length of ownership, Capital Gains Tax is assessed on any gain resulting from the sale or transfer of residential property.
Tax
The profit from the sale of a property that you have owned for more than 24 months will be taxed as a long-term capital gain at a rate of 20% under section 112 of the Income Tax Act of 1961. However, the taxpayer will be subject to short-term capital gain tax at the applicable marginal slab rates if the house property is held for a period of up to 24 months.
Act on Income Tax By taking advantage of various tax exclusions provided by the Income Tax Act while selling a residential property, you can lower your tax obligation for capital gains tax. By investing the income or earnings in particular designated assets, these exemptions may be used.
Section 54 of the income tax act: Exemption for Investments in Indian real estate
According to Section 54 of the Income Tax Act. An individual or HUF may invest capital profits in a residential property in India. In order to claim tax exemption on long-term capital gains resulting from housing property. There are some requirements that must be met in this. For the new house property to qualify for the exemption, it must be built within three years of the old house’s transfer date. Or it must be purchased within one year of the transfer date or within two years of the transfer date.
A waiver of taxes
This means that you are eligible for a tax exemption if you purchase a new residential property within two to two years of selling your old one. Even if you build a new home within three years after the sale of the old one, you are still eligible for the exemption. Taxpayers should be aware that this deduction is only applicable to residential property bought or built in India.
Read More: No one is buying Tata Nexon EV! This electric car is currently the most seller
|
|
  YouTube |
         Click Here |
| Â Facebook Page |
         Click Here |
| Â Instagram |
         Click Here |
|  Telegram Channel |
         Click Here |
