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Old house: If you are preparing to sell your old house then first know the income tax rules.

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Old house: If you are preparing to sell your old house then first know the income tax rules.
Old house: If you are preparing to sell your old house then first know the income tax rules.

Income tax rules say that whether there is profit or loss on selling the property, the owner of the property will have to pay tax on the amount. This tax is calculated under Capital Gains. Let us know about it in detail.

If you are preparing to sell your house or land in the new year, then you should know the rules related to tax once. Actually, the amount you get on selling the house is also taxed. Income tax rules say that whether there is profit or loss on selling the property, the owner of the property will have to pay tax on the amount. This tax is calculated under Capital Gains and is called Capital Gains Tax. Know important things related to capital gains tax from CA Rahul Kumar Aggarwal here.

Long Term Capital Gains

Rahul says that the house should be sold after 24 months i.e. two years after purchasing it and the tax paid on the profit from the sale is called Long Term Capital Gains. In this, the profit made from sale will be taxed at the rate of 20 percent. However, in this case you can claim tax exemption.

Short Term Capital Gains

If you sell a house or land within 24 months of purchasing it and the profit you earn on it is considered a part of your income and tax is calculated as per your tax slab.

Understand the rules regarding home loan

Now, if you sell or transfer the house within 5 years of the end of the financial year of purchase, then all the benefits of exemption under Section 80C that you are getting, or have already received, will be reversed. Whatever tax exemption has been taken under Section 80C last year will be part of your income in the year in which the house is sold. If you understand in simple words, your tax liability will increase in the year of sale of the house.

Take tax exemption on capital gains like this

Rahul says that to get tax exemption on capital gains after selling the house, you can see the rules of Section 54 of the Income Tax Act. Under Section 54, if a person buys another house with that amount within the stipulated time, the amount invested in the new house is reduced from taxable capital gains. To avail this benefit, it is necessary to purchase a new residential house property or construct a house. This property should be purchased within 2 years from the date of transfer. If the property is under construction, it should be completed within 3 years from the date of transfer.

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