Is the money earned from selling property or land is taxable in INDIA? If yes them how tax is calculated?

Question

If a persons sells his property in INDIA then are there any taxes applicable to that? If yes then how it can be exempted? How the money should be used or invested in order to avoid / minimise Income tax ?

Answer 1

Yaa. Short term/long term capital gain tax is applicable.for further details,consult your CA.

Answer 2

Money earned is taxed as Long Term Capital Gains.

Calculated as follows:

Take Full value of consideration(sale price)

Deduct cost of aquisition after indexation

Deduct cost of improvement after indexation

Deduct expenditure on transfer.

Balance is your capital gain.

Pay 20% tax on the gain.

Save tax by investing in another property of higher value or in Capital Gain bonds or Deposit the gain in Capital Gain A/c of a bank.

Answer 3

For computation of capital gains. read

http://mytaxes.in/index.php?topic=30.0

For tax saving investments on capital gains: Exemptions from Capital Gains under Sections 54, 54B, 54D, 54EC, 54F, 54G, 54GA

http://mytaxes.in/index.php?topic=31.0

Answer 4

Yes very much taxable as it is capital gains to you. The tax component would reduce if you use the entire gains to buy another property or invest the same in government bonds.

However when you encash the bonds you would still be liable to tax.