Buy Home Tax Savings: If you invest in property, then you can get the benefit of saving in tax as well. The Central Board of Direct Taxes (CBDT) has extended the last date for people saving Long Term Capital Gains (LTCG) tax under section 54 to section 54GB.
According to the circular, if a person wants to invest capital gains in property by selling a house or any other capital asset, then earlier the time was fixed from April 1, 2021 to February 28, 2022. But now this deadline has been extended to 31 March 2023.
How to save tax
CBDT issued a circular on 6 January 2023. In the Income Tax Act-1961, an individual gets an opportunity to save on LTCG by investing in the prescribed mediums under section 54 to 54GB. As per income tax rules, a person can save tax on long term capital gains under section 54 by buying a house. Tax can be saved on LTCG coming from selling the house under section 54. LTCG can be saved under section 54 if the house is constructed within 2 years from the date of sale or 1 year before the sale of the asset or 3 years from the date of sale. Then it gets its benefit.
Know what is the option
If you do not want to buy a house to save tax on LTCG, you can also invest in 54EC Capital Gains Bonds. Once the long term capital asset is sold, the person needs to invest the LTCG amount in prescribed bonds within 6 months of the sale. The tenure of these bonds is 5 years. You can earn good profits on these bonds. Also, the interest on your earnings is taxable.
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