Immovable
properties i.e., plot of land, residential flats or house, commercial
properties etc. are treated as Capital Assets u/s 2(14) of the Income-tax Act,
1961 (‘the Act’) and accordingly gains arising from the Sale/transfer of
immovable property is chargeable to income tax under the head Capital gains.
Further, it must be noted that immovable property which is classified as Rural
Agricultural land as per the provisions of the Act, is not treated as
Capital asset and accordingly gains arising from the transfer of same is not
chargeable to tax. It may also be noted that a land has to qualify certain
prescribed conditions mentioned under the Act to be defined as Rural
agricultural land.
The Capital gains on sale of Immovable properties may be classified into
Long Term or Short-Term Capital Asset based on the period of holding as follows:
|
Capital Asset
|
Short Term
|
Long Term
|
|
Immovable property being land or
building or both
|
If held for a period not exceeding 24 months from
the date of acquisition.
|
If held for a period exceeding 24 months from the date of acquisition.
|
|
Tax Rates applicable
|
As per applicable slab rates – Highest slab rate being
30%*
|
20%*
|
|
Tax to be deducted at source by the Buyer, where seller is Non-
Resident Indian (NRI)
|
30%*
|
20%*
|
*Plus
applicable Surcharge, Health and Education Cess.
Updated 10/2022