TAX GRIP

  Section 54: Exemption on Capital Gain Tax on sale of Residential House Property in India   The Income tax act exempts total or partial exemption of capital gain on sale of capital asset by investing in another capital asset within a prescribed time period subject to certain conditions. Under Section 54: Capital gain on sale of Residential Property Conditions: House property/properties is a residential house. The house property (self-occupied or let-out) is a long term capital asset i.e it must be held for a period of more than 24 months before the sale of the property.

  CALCULATION AND INDEXATION IN CAPITAL GAIN How to calculate Capital Gain? Capital Gain arising on transfer of a short-term capital asset is short-term capital gain, whereas transfer of a long-term capital asset is long term capital gain. The tax incidence is higher in case of short term capital gain in comparison to long term capita gain. Short Term Capital Gain Full value consideration:   The consideration received or receivable by the assessee

  CAPITAL GAIN TAX IN INDIA   DEFINITION, TYPES AND TAX RATES   Capital Gains Tax Capital gain can be defined as any profit or gain that is arises from the sale of a ‘capital asset.’ The gain or profit that is received comes under the ‘income’ category. Therefore, a tax needs to be paid on the income that is on transfer of a capital asset. The tax that is paid is called capital gains tax, which can either be long term or short term. As per Income Tax Act, capital gains tax is not applicable in case the individual inherits the property as there is only transfer of ownership and no sale of property. Any capital asset received on inheritance or will is not taxable. However, if the person who has inherited the property decides to sell it, tax will have to be paid on the income that has been generated from the sale. Profits or gains arising in the previous year in which the transfer took place shall be considered as income of the previous year which is charg...