Capital Gains Tax on Sale of Property in India 2024 (2024)

FAQs

Capital Gains Tax on Sale of Property in India 2024? ›

In the Budget 2024, the FM announced the withdrawal of indexation benefits from real estate and lowered the long-term capital gains (LTCG) tax from 20% to 12.5%.

Capital gains tax rate 2024

In 2024, single filers making less than $47,026 in taxable income, joint filers making less than $94,051, and heads of households making $63,000 or less pay 0% on qualified realized long-term gains. If your taxable income exceeds those amounts, you may be subject to 15% and 20% tax rates.

Capital gains up to Rs 1.25 lakh per year (equity) are exempted from capital gains tax. Long-term capital gain tax rate on equity investments/shares will continue to be charged at 12.5% on the gains.

The senior citizens are subject to the same long-term capital gains (LTCG) tax rules on property as other taxpayers. LTCG on property, which is held for more than 24 months, is taxed at a rate of 12.5% without indexation benefit.

Section 54F: If the gains from selling any long-term asset are reinvested in a residential property within 1 year before or 2 years after the sale date, or if the new property is constructed within 3 years from the sale date, the entire amount can be claimed as a tax exemption.

Capital Gains Tax for People Over 65. For individuals over 65, capital gains tax applies at 0% for long-term gains on assets held over a year and 15% for short-term gains under a year. Despite age, the IRS determines tax based on asset sale profits, with no special breaks for those 65 and older.

Here's how it works: Taxpayers can claim a full capital gains tax exemption for their principal place of residence (PPOR). They also can claim this exemption for up to six years if they move out of their PPOR and then rent it out. There are some qualifying conditions for leaving your principal place of residence.

It is calculated by subtracting the asset's original cost or purchase price (the “tax basis”), plus any expenses incurred, from the final sale price. Special rates apply for long-term capital gains on assets owned for over a year.

As per the Indian Income Tax Act, any capital gain arising from the sale of property is subject to tax. Property for the purpose of capital gain tax includes residential property, automobiles, land, buildings, gold, equity shares, and equity-oriented funds, etc.

Do I have to pay capital gains tax immediately in India? ›

You owe the tax on capital gains for the year you realise the gain. For example, if you redeem your equity investments anytime between 1 April 2022 to 31 March 2023. Then your taxes for the gains can be filed for the financial year 2022-23.

Capital Gains Tax Formula Calculation A basic formula is: - (Sale Price - Cost of Transfer - Indexed cost of acquisition - Indexed Cost of improvement) x Applicable Short Term/Long Term Capital Gains Tax rate.

The penalty may range between Rs 10,000 and Rs 1,00,000. As per Section 276C, if a taxpayer willfully attempts to evade tax or under-report income with the amount exceeding Rs 25 lakh, it invites imprisonment for a term of at least six months up to seven years along with a fine.

This is because even though the tax rate for long-term gains has been hiked from 10% to 12.5%, the exemption threshold has also been raised from Rs.1 lakh to Rs.1.25 lakh. This increase in exemption means that those with gains of Rs.1.25 lakh in a year will save Rs.2,600 in tax.

It is calculated by subtracting the asset's original cost or purchase price (the “tax basis”), plus any expenses incurred, from the final sale price. Special rates apply for long-term capital gains on assets owned for over a year.

For non-resident Indians (NRIs), long-term capital gains are subject to a flat tax^* rate of 20%. Short-term capital gains are taxed at the applicable income tax slab rates based on the NRI's total taxable income in India.

This tax is applied to the profit, or capital gain, made from selling assets like stocks, bonds, property and precious metals. It is generally paid when your taxes are filed for the given tax year, not immediately upon selling an asset.