Indexation gone. How about selling old house and buying a new one? – Times of India

Inflation is not your finest buddy in the event you plan to promote a property. For years, Indians had the choice of lowering tax on revenue constructed from promoting a home by making use of what’s known as ‘indexation profit‘. It allowed the distinction between buy and sale value of a home (revenue) to be decreased by the inflation fee that prevailed in the course of the time property was owned.
This provision allowed substantial discount in tax fee, relying on how lengthy the property was in possession.When inflation was greater than enhance in property price–or property misplaced value–taxpayers may declare capital loss, which might enable them to save lots of taxes on different capital positive aspects throughout a yr.

After July 23, sale of homes purchased after 2001 will appeal to 12.5% (long-term capital achieve) tax. Relying on the quantity concerned the precise tax fee may go as much as 14.95% (12.5% + 15% surcharge + 4% cess).
Except you resolve to purchase one other property and pay no tax in any respect.
Here is an instance:

Even this tax might be saved if the quantity is invested in capital positive aspects bonds (e.g. REC, NHAI, PFC) as much as Rs 50 lakh. If the property is held collectively, the eligibility goes as much as Rs 1 crore. The part 54 profit is capped at Rs 10 crore.
“Whereas withdrawal of indexation profit will harm middle-class buyers who had diversified into actual property, for these able to reinvest in a brand new property, there’s a option to reduce the tax outgo or scale back it to a negligible quantity,” says Surya Bhatia, founder AM Unicorn.
The prospect to purchase your manner out of paying long-term capital positive aspects tax on sale of previous properties has specialists anticipating a pick-up in housing market.