Last Updated on 26/07/2024 by wccexam Desk
Ever since the budget was presented, there has been a big controversy over property tax. The government has reduced the Long Term Capital Gain (LTCG) tax on property from 20% to 12.5%. At the same time, the indexation benefit has been removed, which used to adjust with inflation and less tax had to be paid on the income from property. The controversy has increased only on this issue.
If you are planning to sell an old property bought in 2001 or later, then you may have to pay more tax than before due to the end of indexation benefits, but there is a way you can completely avoid LTCG tax. You just need to do one thing.
How will there not be even Rs 1 LTCG tax?
LTCG tax on property has been reduced, but indexation benefit has been removed. In such a situation, if you want to avoid this tax, then you have to do one thing for this, only then you can avoid this tax. Revenue Secretary Sanjay Malhotra said that if a person uses the profit amount (Capital Gains) by selling his old house or property to invest in a new property, then he will be exempted from paying tax on any LTCG. This means that you will not have to pay even a single rupee of LTCG tax.
Related news
- After marrying Alia Bhatt, Ranbir Kapoor had to compromise with life, said- that too…
- Manu Bhaker reaches the final of the 10m air pistol event!
- Lucknow: 2 accused arrested in case of beating a youth to death, dispute was over electricity supply
- ‘It is their loss, but…’, what did NITI Aayog say about the 10 states that did not attend the meeting
- Chief Ministers of these 10 states did not attend the meeting of NITI Aayog, see the complete list
There is no tax on buying new property from the profit
According to a report by Economic Times in a news published on India Today, the Revenue Secretary said that the tax is applicable only when the profit is not reinvested in the house. If you sell the house and buy a house using only the profit, then there is no tax on it.
What is indexation?
Indexation adjusts the purchase price of a property according to inflation over time, which is used to calculate capital gains. The government releases the Cost Inflation Index (CII) every year to measure value changes relative to the base year (2001-2002). Indexation is calculated on this basis.