Ltcg on residential property - without indexation

Dear Experts,

 

A query on LTCG on residential property (plot). I understand that with indexation, rate of tax is 20% and flat rate of 10% without indexation.

 

In many very old properties, the sale price and the profits are almost same (the purchase price was less at that time). So I feel that going without indexation would be a far better option.

 

Could you please clarify?

 

Regards,

Harsha Vardhana R

Replies (3)

The Benifit of With Indexation @ 20% or With out Indexation @ 10% is available only in case of Longterm capital asset being Shares on which such transaction doesnot subject to Security Transaction Tax. Hence you can not go for computation of capital gain on sale of Residential property without Indexation @ 10%

Dear Nuli,

 

Thanks for the clarification. Now I understand that for property, it is always better to apply indexation.  That would save some money.

 

Regards,

Harsha Vardhana R

Hi Sarsha,

you can invest u/s 54EC in specified bonds issued by REC & NHAI upto 50 lac and  also invest u/s 54F in residentail house property.

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