NRIs CORNER - LONG TERM CAPITAL GAINS OF IMMOVABLE  PROPERTY  & OTHER ASSETS  OTHER THAN RESIDENTIAL HOUSE, SHARES & MUTUAL FUNDS

Like most advanced nations, India also has a pragmatic approach while taxing gains arising out of Sale of Capital assets. By taxing gains on Long term investments at lower rates the Government indirectly encourages Investments for growth and development rather than trading of capital assets. Tax provisions of such gains from immovable and movable assets are discussed herein:

1. Capital Gains - Meaning:

.01  Profits and gains earned upon sale of any immovable or movable assets are taxed under the head of "Capital Gains" under the Income Tax Act, 1961.

.02 Capital Gain will arise at the time of transfer i.e., sale, exchange, partition of family, relinquishment etc.

.03  Such gains are classified as "Long Term Capital Gains (LTCG)" if the assets are held for a period of more than 24 months and as "Short Term Capital Gains (STCG) if held for lesser period.

2.Tax Rates:

.01  LTCG are taxed at flat rate of 12.50%.

3.Tax Exemptions:

.01  Capital gains of immovable property and other movable assets will be exempt from tax if the same are invested in purchase of a Residential house property; Capital gains bonds etc. which are discussed in details under appropriate topics here with.