Capital Gain Tax on Property : If you do not know about Capital Gain Tax, then this news will prove to be very useful for you. The Income Tax Appellate Tribunal has given an important decision on capital gains tax. The tribunal has empowered the NRI taxpayer to claim exemption on the expenditure incurred on the repair of the house.
Claim tax exemption on expenses
The tribunal said in the order that tax exemption can be claimed on expenses incurred for enhancing the amenities of the house such as installing tiles or painting the walls. Even if this amount is spent in cash, the exemption can be claimed. However, it is related to capital gains tax on the sale of flats.
No discount on cash payment
In this regard, experts say that unaccounted money was not used in the payment and the taxpayer was not doing any business. The provision related to payment in cash is not applicable. According to the rules, the capital gain is calculated on the basis of the sale amount minus cost of acquisition and cost of improvement.
This is the condition on selling the house
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- Let us tell you that if you get a lump sum money from selling any property, then capital gains tax will have to be paid. There are two types of tax on the profit earned from selling the house.
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- If you have sold the house after keeping it with you for 2 years, then it will be considered as Long Term Capital Gain tax. Capital gains tax of 20 per cent is levied on long term capital gains.
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- If you have sold the house before 24 months, then it will be considered as Short Term Capital Gain. If you had made any improvement or expansion after buying the property, then income tax exemption can be claimed by taking the index cost of such expenses. This reduces the burden of capital gains tax.
