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Capital gains are the profit you make when you sell a capital asset \u2013 a plot of land, a residential house, a commercial building, or any other capital asset for a higher price than the price you paid for acquiring it. The rates levied are 20% for Long Term Capital Gains (LTCG) and Short Term Capital Gains (STCG), depending on an individual\u2019s property tax bracket. Capital gains can be divided into two major classifications:<\/span><\/p>\n <\/br><\/p>\n <\/br><\/p>\n STCG tax on property is the capital gains arising out of the sale of any property within 24 months from the date of purchase of the said property. For the given financial year in India, STCG is included in the seller\u2019s total income and is charged to the seller according to the income tax rates applicable to his tax slab. Knowledge of STCG is important as it provides important insights on how best to deal with tax issues.<\/span><\/p>\n <\/br><\/p>\n <\/br><\/p>\n LTCG tax on the property is levied on the capital appreciation gained from the sale of a property, provided that the property was held for 24 months and above. In India, long term capital gains on property are further taxed at 20% with an indexation advantage, meaning that the property benefits from the inflation rate at the time of sale. An understanding of LTCG is important as it should form part of the tax planning process alongside directing individuals in managing their real estate investment.<\/span><\/p>\n <\/br><\/p>\n <\/br><\/p>\n An individual can choose from four tax exemptions (sections 54, 54B, 54F, and 54EC) based on the type of reinvestment made after receiving long-term capital gain consideration.<\/span><\/p>\n <\/br><\/p>\nShort Term Capital Gains Tax on Property<\/b><\/h3>\n
Long Term Capital Gains Tax on Property<\/b><\/h3>\n
Capital Gains Tax Exemptions on Selling Property<\/b><\/h3>\n