You may be pleased when you sell your house for a good profit, but let me tell you there are tax issues involved as well. Capital gain tax applies to any profit or capital gain from the sale of real estate. If you sell a house within two years after buying it and make a profit, the government classifies that profit as a short-term capital gain (STCG). So, the capital gains selling house less than 2 years will be around 20%. Read on to know more.
What are the Capital Gains on House Sale Less than 2 Years?
Short-term capital assets are those that are kept for less than 36 months before being sold or transferred. This period is 24 months or fewer for homes and other immovable properties if the transaction takes place after March 31, 2017.
Let me tell you, the gains are taxed at the individual’s applicable income tax slab rate. You can calculate short-term capital gains using the below formula.
STCG = Sale Price - (Purchase Price + Cost of Improvements + Expenses on Sale)
The cost of improvements and transfer-related expenses like brokerage fees or legal charges can be deducted to reduce the taxable gain.
The STCG amount is added to your total income and taxed as per your income slab (e.g., 5%, 20%, or 30%, depending on your total income). No indexation benefits are available for short-term capital assets.
Investing in tax-saving instruments like ELSS funds, PPF, or NPS may help reduce overall tax liability.
This is all about capital gains tax on house sale less than 2 years.
Get Help with Capital Gain Tax on Sale of Property from Experts at NoBroker.Read more
When Do You Have to Pay Capital Gains Tax?
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What is Capital Gains Selling House Less than 2 Years?
kannu
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2024-12-05T06:52:01+00:00 2024-12-05T06:52:02+00:00Comment
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