How much tax do I pay on sale of property in India?

How much tax do I pay on sale of property in India?

This is why it is advisable to hold a property for at least three years. If you sell after three years, the profit is treated as long-term capital gains and taxed at 20% after indexation.

How much tax do I pay if I sell my house?

It depends on how long you owned and lived in the home before the sale and how much profit you made. If you owned and lived in the place for two of the five years before the sale, then up to $250,000 of profit is tax-free. If you are married and file a joint return, the tax-free amount doubles to $500,000.

How can I avoid paying tax on selling property in India?

How to save tax on property sale?

1. Holding period for capital gains.
2. Benefits under Section 54 on purchase of new property.
3. Indexation benefits on capital gains on sale of a property.
4. Exemptions under Section 54 EC on purchase of specific bonds.
5. Exemptions under Section 54GB.
6. Setting off gains against losses.

What happens when you sell your house for a profit?

This strong history of property value gains has put many Americans in a position to sell their home for a tidy sum. But first-time sellers may wonder: What happens when you sell your house for a profit? How do you handle the escrow process and settle up at closing? Will you owe any taxes?

Do I need to pay tax if I sell my house in India?

If you are planning to sell your property, you’ll have to pay capital gain tax on the profit earned after considering the inflation and indexed cost of acquisition. If you’re selling a property in India, the profits you earn are called Capital Gains.

Do I have to pay taxes on my home sale?

You pay tax on your wages, you pay tax on your investments, you pay tax on your business — but your home is in theory tax free, even if you make a profit when you sell it. (That’s only fair, after all — you need somewhere to live, and if you’re selling up, you’re probably reusing the proceeds to buy another place.)

Is Selling house taxable?

For most of us, the most valuable asset we own is our family home . So, does that mean that you have to pay CGT when you sell your house? Fortunately, in most cases, the answer is no. The tax law provides an automatic exemption for any capital gain (or loss) that arises from the sale of a taxpayer’s main residence.

What kind of tax is on sale of property in India?

Under the revised rules in India, if a property is sold after two years from its acquisition, it would attract long-term capital gains (LTCG) tax. A property sold before that period would attract short-term capital gains (STCG) tax.

What kind of tax does NRI have to pay on property sale?

Capital gains tax for property sold by NRI In case the transaction qualifies to attract long-term capital gains (LTCG), a tax rate of 20% will be applicable on the sale. Do note here that the NRI seller will have to pay 21% tax on the sale amount and not the profit money as LTCG. They have to undergo a lengthy process to claim refund.

Do you pay tax on Long Term Capital gains in India?

The rate of tax on the capital gains is lower, if the holding period of the property is considered as long term, while the rate is higher for a property held for a short term. Under the revised rules in India, if a property is sold after two years from its acquisition, it would attract long-term capital gains (LTCG) tax.

How to calculate capital gains tax on house sale?

Calculation of Short Term Capital Gain Tax on Sale of a House: Short term capital gains are ascertained by calculating the difference between the price of acquisition of the house and the sale price of the house, provided that the sale has taken place less than three years after the date of purchase of the house.