Save Capital Gains Tax on Property Sale: Rules and Exemptions Explained

• Selling property can incur capital gains tax, but the Income Tax Act, 1961, offers various provisions to reduce or avoid it.
• Long-term capital gains (LTCG) apply if property is held for over 24 months, taxed at 12.5% or 20% (indexed) for houses bought before July 23, 2024.
• Short-term capital gains (STCG) apply if sold within 24 months, taxed as per income slab with no special tax-saving benefits.
• Key exemptions include Section 54 (reinvesting in residential property), Section 54F (reinvesting other asset gains in a house), and Section 54B (for farmers buying new farmland).
• Other sections like 54EC (government bonds), 54EE (approved funds), 54G/GA (industrial relocation), and 54GB (start-up investments) also provide tax relief.

Why It Matters: Utilize various sections of the Income Tax Act to significantly reduce or avoid capital gains tax on property sales.