smp world

TAX BENEFITS

What are the taxes you have to pay while purchasing property?

If you are buying a new property, you have to pay Service Tax, VAT and Stamp Duty on the total amount of purchase. If you buy re-sale property, then you do not have to pay stamp duty & VAT. However stamp duty will still have to be paid.

When are capital gains applicable and how can capital gain tax be saved/reduced?

Capital Gain is applicable when:

  • The sold property has been withheld by a person for a period of more than three years from the date of purchase/possession.
  • The sale proceeds are invested in a residential property which is bought one year before the sale of property or two years after the sale of first property.
  • The new property is bought after the sale of the first property.
  • Capital Gains Tax can also be saved by investing the sale proceeds in Capital Gain Bonds.

Can the capital gain amount be used for clearing loans?

Yes, the amount can be used to clear loans but in that case the tax on Long Term Capital Gain cannot be saved.

If a person invests a part of his capital gain amount in residential property, then is the remaining amount exempted from Income Tax?

No. Income Tax is payable on the remaining amount unless it is invested in Capital Gain Bonds.