There are a couple of changes made in taxes on the sale of property in the finance act 2020.

Here is a quick summary of those changes.

As you know there are two taxes payable on the property sale.

1- Withholding or advance tax
2- Capital gain tax

The holding period for both taxes has been reduced to 4 years. Previously it was 8 years for an open plot.

There will be no gain tax charged in case you sell your personal house provided you are personally living in it.

The calculation of capital gain will be as follows:

*In case of sale of property in first year= Full amount
*2nd year, it will be ¾ of the gain
*3rd year, it will be 1/2
*And in 4th year,, it will be ¼ of the gain.

The tax rate on Capital Gain will be as follows:

*If the gain is up to Rs 5 million, the tax rate will be 2.5%
*For 5 to 10 million, it will be 5%
*Between 10 to 15 million, it will be 7.5%
*For the above 15 million, it will be 10%.

The advance tax rate is 1% of recorded sale value for filers and 2% for non-filers.

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