How do I avoid capital gains tax when selling a house in India?

However, you can substantially reduce it by using one of the following methods:

1. Exemptions under Section 54F, when you buy or construct a Residential Property.
2. Purchase Capital Gains Bonds under Section 54EC.
3. Investing in Capital Gains Accounts Scheme.
4. Purchase Capital Gains Bonds under Section 54EC.

How to save tax on property sale?

1. Holding period for capital gains.
2. Benefits under Section 54 on purchase of new property.
3. Indexation benefits on capital gains on sale of a property.
4. Exemptions under Section 54 EC on purchase of specific bonds.
5. Exemptions under Section 54GB.
6. Setting off gains against losses.

How long does it take to sell a house in India?

Only one additional house property is purchased / constructed. The property being bought / developed is within India’s national borders. You don’t sell the new house for 3 years after taking possession of it. If the cost of the new property is lesser than the sale amount, the exemption then only applies proportionately.

What to do with capital gain on sale of house in India?

The remaining money can be re-invested under Section 54EC in under 6 months. If you can’t construct a house immediately after benefitting from a capital gain (but plan to do so sometime in the near future), then you can put the profit amount in any public sector bank under the Capital Gains Account Scheme (CGAS).

Do you pay tax on sale of property in India?

In India whenever someone requires money he either sells his property, shares or gold. Property is considered as capital asset under income tax law and its sale has wide range of tax implications.

How is the selling price of a house calculated?

For example, if a property is being sold after 10 years of construction, the selling price of the structure will be calculated by the following formula: Number of years after construction : Total age of the building = 10 : 60 = 1:6 The remainder of the useful age is the actual selling price of the construction.