If I sell my residential property do I need to pay any taxes on capital I receive?



Ihave sold my property & obtain cheque from buyer.If I want to invest this money do I need to pay any taxes to the Govt of india or again I have to buy property to avoid taxes.?

If I sell my residential property do I need to pay any taxes on capital I receive?
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3 Replies to “If I sell my residential property do I need to pay any taxes on capital I receive?”

  1. If you have held the property for more than 3 years then you have incurred LTCGs.

    LTCGs are taxed at @ 20% (with indexation benefit).

    For exemption from LTCGs tax you can reinvest the gains either in another residential property u/s 54 or specified bonds of NHAI and REC u/s 54EC.

    HMT


  2. If the property has been bought before 36 months, you incur a long term capital gain @ 20% on { sales amount – (indexed cost of acquisition + indexed cost of improvement) }.

    U/s 54-If you purchase another residential property with in two years from the sale of this property or you have already purchased another residential property before one year from the date of sale, or if you are constructing another residential property with in 3 years from the date of sale then the cost incurred in purchase or construction of the new residential property can be set off against the capital gain on sale of your property. But if the new property purchased or constructed is sold within 3 years from the date of purchase or construction the entire amount you receive as exemption would be treated as short term capital gain.

    Alternatively, U/s 54EC, if the gain you occurred on sale of residential property is invested in redeemable bonds issued by National Highway Authority of India (NHAI) or Rural Electrification Corporation with in 6 months from the date of sale of residential property and the amount so invested should not exceed 50 lakh in any financial year. The amount so invested out of the gains can be set off against the gain. If the bonds invested in are sold or converted into money within 3 years from the date of accusation of the bond, then the exemption availed will be treated as long term capital gain.

    If the property sold has been purchased within 36 months of the sale, then the gain { sale value – (cost of acquisition + cost of improvement) } is chargeable to tax.

    But you can not avail exemption U/s 54, 54EC

    Hope the things are clear, if having any further doubts mail me






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