selling of property

Q: I booked a 850 sq.ft. flat in year 2010. I booked it at the basic price of Rs. 1696/- per sq.ft. At present finishing work is going on the flat. I had taken a loan for this flat.I wish to sale it at the price of 3000/- per sq.ft. If deal will be finalized any tax will be deducted or not.

sameer rawat,

12th January 2016

Property Selling in Jaypee Aman, Sector-151, Noida

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Replies (2)

I would like to sell 850 sft 2 BHK Flat @ J P Aman Tower II
What is the best price I can get

Chandrasekhar Subramanyam, Bangalore

23rd April 2016

Comment

There are certain things which you have to keep in mind, this is because under the Income Tax Act, if you sell a house within 3 yrs of buying it, the tax benefits on the principal repayment and interest paid on the home loan are reversed. These are then included in your income when you file your tax return. Also, if a house is sold within 5 yrs of the end of the financial year in which it was purchased, all the deductions claimed under Section 80C with respect to the property are added to the taxable income in the year of sale.

Sekhar, Noida

13th January 2016

Comment

Sekhar is absolutely right......
Real estate is regarded as an asset, so the profit from its sale is assessed under the head ''capital gains''. If a property is sold within 3 yrs. of buying it, it is treated as a short-term capital gain. This is added to the total income and taxed according to the slab rate.

Whereas, if you sell a property after three years from the date of purchase, the profit is treated as a long-term capital gain and is taxed at 20% after indexation. While you can avail of various tax exemptions in case of long-term capital gains, no such benefit is provided for short-term ones.

Lohit Raj, Delhi-NCR

13th January 2016