How to avoid capital gains tax on sale of property in India?

Do I have to pay tax if I sell my house in India?

But there is something which needs your attention, selling off property is liable for tax payment in India. The tax is paid on the sale of all property types except agricultural land. The property seller has to pay two types of taxes while receiving any income from the sale of immovable property.

Can you reinvest to avoid capital gains?

Do I Pay Capital Gains if I Reinvest the Proceeds From the Sale? While you'll still be obligated to pay capital gains after reinvesting proceeds from a sale, you can defer them. Reinvesting in a similar real estate investment property defers your earnings as well as your tax liabilities.

Do senior citizens have to pay capital gains tax in India?

Residential Indians of 80 years of age or above will be exempted if their Annual Income is below Rs. 5,00,000. Residential Indians between 60 to 80 years of age will be exempted from long-term capital gains tax in 2021 if they earn Rs. 3,00,000 per annum.

How much tax do I pay after selling land in India?

As per Section 112 of the Income Tax Act, LTCG on the sale of immovable property in India is taxable at 20% with an indexation benefit. To take the indexation benefit, the taxpayer can calculate the indexed cost of the acquisition using Cost Inflation Index i.e. CII to compute the long term capital gain.

How do I avoid taxes after selling my investment property?

Use a 1031 tax deferred exchange

Section 1031 of the Internal Revenue Code allows real estate investors to sell a rental property, buy another property at an equal or greater value, and defer paying tax on the capital gains.

What is the 6 year rule for capital gains tax?

Here's how it works: Taxpayers can claim a full capital gains tax exemption for their principal place of residence (PPOR). They also can claim this exemption for up to six years if they moved out of their PPOR and then rented it out.

What is the capital gains rate for 2023?

Long-term capital gains tax rates for the 2023 tax year

In 2023, individual filers won't pay any capital gains tax if their total taxable income is $44,625 or less. The rate jumps to 15 percent on capital gains, if their income is $44,626 to $492,300. Above that income level the rate climbs to 20 percent.

What is the long term capital gain tax rate on real estate in India?

Tax Implications on LTCG on Property

Currently, the long term capital gain tax rate on property is set at 20% with the addition of cess and surcharge.

How long do you have to reinvest after selling a house?

If the home is a rental or investment property, use a 1031 exchange to roll the proceeds from the sale of that property into a like investment within 180 days.13.

What is the tax on long term capital gains in India?

LTCG is 10% for gains in stocks and equity mutual funds. It is 20% for gains in real estate, debt funds and other assets along with the benefit of indexation. Assets hold before the specified holding periods are subject to Short Term Capital Gains Tax (STCG). This is generally imposed at slab rate.

How do I invest money after selling my property?

Can I buy land to save capital gains tax India?

No exemptions can be claimed. Capital Gain Tax cannot be saved if the sale proceeds are invested in a commercial property, agricultural land or plot. According to the latest amendments in the Income Tax Act, the residential property which is bought by re-investing the long-term capital gains must be situated in India.

How is capital gains calculated on sale of property?

Subtract your basis (what you paid) from the realized amount (how much you sold it for) to determine the difference. If you sold your assets for more than you paid, you have a capital gain. If you sold your assets for less than you paid, you have a capital loss.

Does an 80 year old have to pay capital gains tax?

The Bottom Line. The IRS allows no specific tax exemptions for senior citizens, either when it comes to income or capital gains. The closest you can come is a back-end tax-advantaged retirement account like a Roth IRA which allows you to withdraw money without paying taxes.

What is the limit for capital gain exemption in India?

The exemption limit is Rs. 3,00,000 for resident individual of the age of 60 years or above but below 80 years. The exemption limit is Rs. 2,50,000 for resident individual of the age below 60 years.

How to reduce or avoid capital gains tax on property or investments?

What is the best way to reinvest capital gains?

However, suppose you have capital gains from selling stocks or other assets. In that case, you may want to consider reinvesting the profit into a QOZ (Qualified Opportunity Zone) Fund to defer the tax obligation. QOZ funds invest in economically distressed communities and offer tax advantages for some situations.

Should I pay capital gains in cash or reinvest?

The investor must pay capital gains taxes on distributions, whether they are taken as cash or reinvested in the fund. The taxes on distributions are due in that tax year unless the fund is part of a tax-deferred retirement account.