{"id":6425,"date":"2022-09-19T13:03:10","date_gmt":"2022-09-19T13:03:10","guid":{"rendered":"https:\/\/www.homebazaar.com\/knowledge\/?p=6425"},"modified":"2025-01-07T13:26:30","modified_gmt":"2025-01-07T13:26:30","slug":"ways-to-save-capital-gain-tax","status":"publish","type":"post","link":"https:\/\/www.homebazaar.com\/knowledge\/ways-to-save-capital-gain-tax\/","title":{"rendered":"Ways To Save Capital Gain Tax On Sale Of Residential Property 2025"},"content":{"rendered":"

What is <\/strong>Capital Gain Tax<\/strong>?<\/strong><\/h2>\n

\"CapitalWhen you sell your property for more than its actual purchase price the returns are known as capital gains. On these profit returns, there is a tax applied by the government which is called a capital gains tax.\u00a0\u00a0<\/span><\/p>\n

Jewellery, Stocks, bonds, valuable metals, and real estate are examples of capital assets subject to taxation.<\/span><\/p>\n

Depending on how long you had the asset until selling it, you’ll either pay tax on the <\/span>capital gains tax<\/span><\/a> or not. Long-term and short-term capital gains are categorised and taxed differently.<\/span><\/p>\n

The short-term capital gain occurs when a capital asset is sold after less than a year of ownership; this gain is taxable as normal income.<\/span><\/p>\n

Although you may have heard, capital gains are not usually treated more favourably than other forms of income. It depends on how long you possessed such properties before you sold them.<\/span><\/p>\n

Selling assets that have been owned for more than a year results in long-term capital gains, which are taxed at a rate of 0%, 15%, or 20%.<\/span><\/p>\n

What is the 2023 Capital Gain Tax Rate?<\/strong><\/h2>\n

The 2022 capital gain tax rate is given in the following table,<\/span><\/p>\n

\"2025<\/p>\n

How Much is The Capital Gain Tax On Residential Property In India?<\/strong><\/h2>\n

\"HowThe current capital gain rate of tax on residential property is 20% plus cess and surcharge.<\/strong><\/p>\n

However, an inherited property is not subject to tax implications. For instance, until the heir chooses to sell the property, ancestral property acquired as a gift from a family member is not taxed.\u00a0<\/span><\/p>\n

If the person sells the property, the long-term capital gain will be taxed in compliance with the same regulations that apply to other properties.<\/span><\/p>\n

How is Capital Gain Tax Calculated on the Sale of Residential Property in India?<\/strong><\/h2>\n

The property gain tax calculated for the sale of residential property is based on the important factors which are the final selling cost of the property, price of acquisition ( it is the asset’s value at the time the seller purchases it), improvement costs (costs a seller generates when modifying or enhancing a capital asset), Cost made during the transfer of property like registry charges, Cost of Acquisition Indexed and Improvement Indexed Cost.<\/span><\/p>\n

The duration for which a property has been owned also affects how capital gains are calculated.<\/span><\/p>\n

The formula for capital gain tax calculation for residential property for Short-term duration is as follows,<\/span><\/p>\n

Short-Term Capital Gain<\/b><\/p>\n

\"Capital<\/p>\n

The formula for capital gain tax calculation for residential property for Long-term duration follows,<\/span><\/p>\n

Long-term capital gain <\/b><\/p>\n

\"CapitalHow Can I Avoid Capital Gains Tax on a Home Sale in India?<\/strong><\/h2>\n

One of the common questions that come to property owners’ minds when they decide to sell a property is how to avoid capital gains tax on home sales. <\/span><\/p>\n

The answer to this question is by making a bond investment after six months of selling the property and collecting the profits.<\/span><\/p>\n

How to Save Capital Gain Tax on The Sale of Residential Property in India?<\/strong><\/h2>\n

\"Save<\/p>\n

At first glance, the gains you could realise from investment in real estate could seem promising. But if you look at the taxes on capital gains then that happiness fades away.\u00a0<\/span><\/p>\n

Here are ways from which you can save or reduce capital gain tax on residential property in India,\u00a0<\/span><\/p>\n