Capital Gains and Tax Relief on Sale of Residential Property
Capital Gains and Tax Relief on Sale of Residential Property Capital gains arising from the sale of a residential house property in India are classified as either Short-Term Capital Gains (STCG) or Long-Term Capital Gains (LTCG) based on the holding period. If the property is held for 24 months or less, the gains are treated as STCG and taxed at the applicable income slab rates. If held for more than 24 months, the gains qualify as LTCG and are taxed at 20% with indexation or 12.5% without indexation, whichever is more beneficial. Indexation adjusts the acquisition cost using the Cost Inflation Index (CII) to consider price inflation, reducing taxable gains and tax liability. Indexation benefit is currently available only to resident individuals and HUFs for properties acquired before 23.07.2024 and held for more than 24 months. Offset Capital Gains Tax by Investing in a Residential House: A Planned Approach Investing in a residential house property can be a powerful tax-saving strateg...