Capital Gains Tax: Those selling land or plots should pay attention, the government has given 2 options on tax, know here...

Capital Gains Tax: Whenever you sell your land or property, you have to pay tax on it. Property sellers have little information about how much this tax will be and how much will have to be paid, if you want to save this tax then how to save it? If you have also recently sold any property or land, then this news is very useful for you. It would be better to bookmark its link or share it on WhatsApp.

When you sell any of your capital assets (such as land or property) and whatever profit you make from it, it is called capital gain. The government imposes a tax on this profit. The government has made some rules regarding tax on the profit (Capital Gains) made on selling land. According to these rules, you have to pay tax. Capital gain is of two types - first long-term capital gain (LTCG), and second short-term capital gain (STCG). If you kept the property for 24 months after buying it, then you will have to pay LTCG tax. If you sell it within 24 months, then STCG tax will have to be paid. This tax will be levied only on profit.

What do government rules say
The government had earlier abolished the indexation benefit (adjusting the effect of inflation) on the sale of immovable property in the 2024-25 budget. However, this decision was changed with an amendment to the Finance Bill 2024. This amendment says that indexation benefits will be available for properties purchased before 23 July 2024. In such a situation, now you and Hindu Undivided Families (HUF) have two options - you can pay capital gains tax without indexation at a tax rate of 12.5 percent or take advantage of indexation at a tax rate of 20 percent.

How to calculate LTCG?
Suppose, you sell a property for Rs 10,00,000 in 2024-25, which you bought in June 2001 for Rs 2,00,000. Now you can calculate LTCG in two ways:

Calculation with indexation
Purchase cost: The price adjusted as per inflation would be Rs 7,26,000, which is obtained by multiplying Rs 2,00,000 by 363/100.

Profit: Rs 10,00,000 (selling price) – Rs 7,26,000 (purchase) = Rs 2,74,000.

Tax: Tax at the rate of 20% would be Rs 54,800.

Calculation without indexation
Purchase cost: Rs 2,00,000.

Profit: Rs 10,00,000 (selling price) – Rs 2,00,000 (purchase cost) = Rs 8,00,000.

Tax: Tax at the rate of 12.5% ​​would be Rs 1 lakh.
With indexation, the tax amount will be less, but you will have to pay tax at the rate of 20%. On the other hand, without indexation, the tax will be higher but the rate will be 12.5%. But if you have earned less profit, then in that case you will have to pay less tax even without indexation. For example, if you bought the property for Rs 2 lakh and sold it for Rs 4 lakh, then in that case the tax calculation will be something like this-
Purchase cost: Rs 2,00,000.
Profit: Rs 4,00,000 (selling price) – Rs 2,00,000 (purchase cost) = Rs 2,00,000.
Tax: At the rate of 12.5%, the tax will be Rs 25,000.