Save TAX On Property Buying and Selling
India's real estate market is booming, and thousands of properties are sold daily. However, property investors are fed up with the high taxes levied while purchasing or selling a property. Today, we will tell you about various methods of how to save tax on sale of property?, such as tax saving schemes and options so that you can save a significant portion of your amount.
How to save tax while purchasing a property?
If you want to save property tax while buying a property, follow these tax saving options:
1. Register Property In the woman's name to get a rebate of up to 2% on stamp duty.
2. Sell Property at a circle rate fixed by the government if the sale value is higher.
3. Opt for ready-to-move Property to be exempt from GST.
4. A home loan can save you money Under Sections 80C, 24, and 80EE of the IT Act.
How To Save Tax On Sale Of Property?
1. Take indexation benefits, which means your property value will be adjusted as per today's inflation rate. Then, the tax will be levied on the profit you gain after selling the Property.
2. Reduce the selling expense, such as brokerage, which will reduce the amount of tax payable.
3. One of the most popular methods of saving tax on the sale of residential Property is to reinvest the capital gains in another residential property.
4. To get tax exemption under section 54EC, you must invest in government-authorised bonds within six months of selling the Property.
5. Section 54GB reinvest in companies involved in manufacturing activities, but you can only invest up to 50 lacs.
How to Save Tax On Selling Land in India?
1. If you've held the land for over two years, it qualifies as a long-term capital asset, resulting in lower tax rates than short-term assets.
2. Long-term capital gains can be adjusted for inflation using the Cost Inflation Index, reducing the taxable amount.
3. Reinvesting the sale proceeds into specified bonds, such as NHAI or REC bonds, within six months can exempt the capital gains tax up to a specific limit.
4. To defer tax on capital gains, deposit the proceeds in a Capital Gains Account Scheme before the due date of filing returns.
5. Splitting ownership between family members can distribute the tax burden effectively.
Invest In Bonds: A Great tax saving schemes
1. When you sell a property and make a profit, you usually pay capital gains tax on the profit earned.
2. You can avoid paying capital gains tax by reinvesting the profit from property sales in specified government bonds within a specific time frame.
3. These bonds, known as Capital Gains Bonds or Section 54EC bonds, are issued by entities like the Rural Electrification Corporation (REC) or the National Highways Authority of India (NHAI).
4. These bonds typically have a lock-in period of three years, during which the investment cannot be withdrawn.
5. Investing in these bonds saves on taxes and contributes to government projects like infrastructure development.
6. It's crucial to consult a financial advisor to understand eligibility criteria, investment limits, and other details before investing.
Conclusion
If you follow the steps specified, you can save significant tax on your Property transaction. These tax-saving options will help you invest your capital efficiently.
Disclaimer: This article is written for education purposes only. Do not use it as a primary resource of information or help. Always seek guidance from professionals in related fields.
.webp)
.webp)
.webp)
