How to save Capital Gains Tax by claiming Exemption u/s Section 54? (Applicable to LTCG on sale of house property only)
You can invest a maximum of Rs 50 lakhduring a financial year in these bonds as per Budget 2015-16. You are allowed a period of 6 months to invest in these bonds, but before the Income Tax Return filing date (to claim this exemption). These are redeemable after 3 years and must not be sold before the lapse of 3 years from the date of sale of the house property. The Bonds issued u/s 54EC for saving of LTCG on sale of property will now have a lock-in period of 5 years instead of 3 years from FY 2018-19. If you transfer or take a loan against these bonds within three years, the capital gain will become taxable. The exemption is equal to the investment or the capital gain, whichever is lower. These bonds are issued by the Rural Electrification Corporation and the National Highways Authority of India. Capital gains from sale of any long-term asset can be claimed as tax-exempt under Section 54EC of the Income-Tax Act by investing in notified bonds within six months of the transfer of Asset. How to save Capital Gains Tax by claiming Exemption u/s Section 54EC? (Applicable to LTCG only, on sale of both land / house property / commercial property) However, you can claim deductions to lower the tax liability on long-term gains. How do I save Capital Gains Tax from sale of Property?Ĭapital gains tax on Short term gains is unavoidable and no exemptions are available to minimize your tax liability. Long Term Capital Gains are taxed at 20%. Short Term Capital Gains are included in your taxable income and taxed at applicable income tax slab rates. What are the applicable Capital Gains Tax Rates on Sale of Property AY 2021-22? Cost Inflation Index (CII) for FY 2020-21/ AY 2021-22 Notified by CBDT at 280. Indexed cost of purchase = (Purchase price / 184) * 254.)īelow is the Cost Inflation Index Table from 2001-02 to FY 2020-21 for your reference. Multiply this by the index as on the date of sale.įor Example : If purchase year is 2011 and year of sale is in Financial Year 2015. How do you calculate the indexed cost of purchase? The indexed cost is calculated with the help of a table of cost inflation index.ĭivide the cost at which you purchased the Property by the index as on the date of the purchase. Your purchase price is adjusted for the impact of inflation. This increases your cost base ie purchase price and lowers your gains. (Indexation is done by applying CII – cost inflation index. With effective from Financial Year 2017-18, the base year for calculation of Indexation is going to be 2001. The only differences are, you are allowed to deduct Indexed Cost of Acquisition/Indexed Cost of Improvements from the sale price and also claim certain exemptions to save capital gains tax. STCG = Total Sale Price – Cost of acquisition – expenses directly related to sale – cost of improvements. Is there any flat land on simcity pc how to#
In this post let us understand – How to calculate Short Term capital gains on sale of land or property? How to calculate Long Term Capital Gains on sale of land or house? What are the applicable capital gain tax rates on sale of land / house property? How to avoid / save / minimize capital gains tax on sale of land or flat? How to calculate Capital Gains on sale of Land or House property? Short Term Capital Gains Calculation is calculated as below: You may have to pay Capital Gains Tax on STCG / LTCG. You will make either Long Term Capital Gain (LTCG) or Long Term Capital Loss (LTCL) on that investment. If Land or house property is held for more than 36 months more than 24 months (w.e.f FY 2017-18 / AY 2018-19) then that Asset is treated as Long Term Capital Asset. You as an investor will make either Short Term Capital Gain (STCG) or Short Term Capital Loss (STCL)on that investment. FY 2017-18)then that Asset is treated as Short Term Capital Asset. If Land or house property is held for 36 months or less 24 months or less (w.e.f. When you sell a capital asset, the difference between the purchase price of the asset and the amount you sell it for is a capital gain or a capital loss. Capital gains and losses are classified as long-term or short-term.
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