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Indian Real Estate Boom Times |
Indian Real Estate: But, Not The Best Time To Sell Your House
Real estate prices may be booming, but it may not be the best time to sell your house, unless there is a spanking new apartment you want to buy, or else you are willing enough to put money in the governments pocket by paying tax.
It is, unlikely, the government will grant capital gains tax exemption to new bond issues this year, which means a large number of people who cashed in on the housing boom, will have to pay more tax.
Earlier, if you bought an apartment for, say, Rs. 15-lakh and sold it off for Rs. 30-lakh, you could have avoided paying the 22% capital gains tax if the profit (Rs. 15-lakh) was used for buying a new house within three years of sale. Alternatively, you could have invested it in bonds issued by the likes of National Housing Bank, National Highways Authority of India, Nabard or Rural Electrification Corporation (REC).
However, this year onwards, finance minister P Chidambaram has decided to restrict the benefit to investment in NHAI and REC bonds, fixing a Rs. 6,500 crore cap. In the present scenario, it is best to wait and see what else is in store, before selling your house for a profit, only to pay a large part of it back to the government.
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Source: ArticleTrader.com
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