Capital gain from sale of house property

Tax laws can be complex and subject to change. It's essential to consult with a qualified tax professional or financial advisor to get accurate and up-to-date information tailored to your specific situation.

In India, when you sell a house property (HP), the profit you make is subject to capital gains tax. There are two types of capital gains:

1. Short-Term Capital Gains (STCG): If you sell the property within two years of acquiring it, any profit is considered short-term capital gains.

2. Long-Term Capital Gains (LTCG): If you sell the property after holding it for more than two years, any profit is considered long-term capital gains.

   For further more detailed information on this topic visit: ITR 2 - Capital Gain Tax on Sale of Land & Building

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Yes, you can purchase two properties in different cities using the proceeds from the sale of your house property in city A and the amount invested in FD. The capital gain tax benefit would be applicable to the entire sale proceeds of Rs 50 lakhs, even though you are using only a portion of it to purchase a property in city B. The remaining amount of Rs 15 lakhs can be used for any other purpose without any tax implications.

In this situation, where you've received a short deduction notice for TDS, and there's a delay in the correction request being resolved, it's essential to take specific steps to address the issue. Here are some general guidelines:

1. Communication with Tax Authorities:

   • Consider reaching out to the income tax department through their official channels for clarification on the status of your correction request.
   • You may contact the Assessing Officer or the concerned jurisdictional officer to explain the situation and provide any additional information they may require.

2. Documentary Evidence:

   • Ensure that you have proper documentation to support your case. This may include proof of the TDS deposit, evidence of the correction request submission, and any communication with the tax authorities.

     For further more detailed information on this topic visit: TDS TRACES by Income Tax Department.

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Property sold at a gain after 24 months of holding is long-term. For properties bought before July 23, 2024, you can choose between two options: pay 12.5% LTCG without indexation, or pay 20% LTCG with indexation using the Cost Inflation Index. The ITR-2 utility for AY 2026-27 requires you to compute both and select the one that results in lower tax. For properties acquired after July 23, 2024, only the 12.5% rate without indexation applies. If you reinvest the LTCG in another residential property within 2 years (or construct within 3 years), Section 54 exemption applies on the reinvested portion. The gains go in Schedule CG of ITR-2. This [capital gains tax guide for AY 2026-27](https://taxgarden.in/blog/capital-gains-tax-india-ltcg-stcg-ay-2026-27) has the CII table, the grandfathering calculation, and Section 54 eligibility conditions.