In order to determine capital gains tax on the Sale of Property or Investments follow these easy steps:
1. Determine for how long were you holding the asset i.e whether its long term or short term
2. Subtract any expenses relating to sale.
3. For short term directly subtract the purchase cost from the sale proceeds. While, in case of long term index the cost using indexation rates provided by the income tax department before subtracting it from the sale value
4. The cost of improvements to be treated same as cost of purchase.
5. Check for exemptions under Sections 54, 54F, etc. Subtract exemptions from total gains to get taxable gains.
6. Apply the applicable tax rate (based on holding period and type of asset).
Comments
0 comments
Please sign in to leave a comment.