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Tax Query: Long and short of residential capital gains tax

The article from The Hindu Business Line discusses the nuances of capital gains tax on residential property in India. It explains that when selling a residential property, the tax implications depend on whether the gains are classified as long-term or short-term. Long-term capital gains (LTCG) arise if the property is held for more than 24 months, taxed at 20% with indexation benefits, which adjust the purchase price for inflation, thereby reducing the taxable gain. Short-term capital gains (STCG) apply if the property is sold within 24 months of purchase, and these are taxed at the individual's applicable slab rate. The article also touches upon exemptions available under sections like 54 and 54F of the Income Tax Act, which allow for tax exemptions if the gains are reinvested in another residential property or specified bonds within certain time frames. Additionally, it highlights the importance of understanding the tax implications before selling property to optimize tax liability.

Read the Full Business Line Article at:
[ https://www.thehindubusinessline.com/portfolio/personal-finance/tax-query-long-and-short-of-residential-capital-gains-tax/article68927113.ece ]