How to save Tax on Capital Gain ?

How to save Tax on Capital Gain ??

If you have got capital gain you are liable to Pay Tax on it . The rate of tax depends on Types of Capital gain , whether on sell of shares or property and whether it is Short term or Long term .

The rate is from 10% to 30% on profit earned.

However best thing is there are ways to avoid Tax on Capital gain , which are illustrated below. 

If you have got Capital gain by way of selling Finished Flat or property you have to invest only Capital Gain or profit

If you have got Capital gain by way of selling Under construction Flat or property you have to invest Whole of the Sale Proceed

Seller has two options either buy a residential property within 2 years or construct a resedential house within 3 years

If you are unable to do above things within time limit you have following options :

CAPITAL GAIN ACCOUNT SCHEME

There is a Govt scheme called : "Capital Gain Accounts Scheme "

a.) If you can not buy another property or Construct a residential house within the due date of Filing of tax return , you can deposit the amount of capital gain in any bank under the Capital Gain accounts Scheme 1988 and then utilise the money within specified time limit to buy or construct the property .

b.) Invest in Capital Gain Bond (SEC 54EC), To save Tax on capital gain you can invest in following bonds within 6 months of sale proceed of property

1. Rural Electricity Finance (REC) Bond

2. Railway Finance (RFC) Bond

3. Power Finance Corpn (PFC) Bond

4. National Highway (NHAI) Bond

Interest rate in these bonds is 5.75% and lock in period 5 years. The annualised return is However 9.75% . Interest is however Taxable on receipt.

for further information please whatsapp 9470307730