In this article, we are going to make our focus on the Long-term capital gains. Have you ever thought about how you can save taxes by buying multiple properties? So now in this article, we are going to tell you how can you save taxes by buying multiple properties. According to the tax laws individuals and HUF can now claim the exemption from the tax on the long-term capital gains on the sale of residential property if the indexed capital gains have been invested for buying or constructing another residential house. Read this entire article to learn an essential thing.
One person asked a question that in 2012, he bought a residential property A, and then in the next year he bought a residential property B for Rs. 62 lahks and Rs. 75 lahks respectively. And in November last year, he gifted property A to his father and he gifted property B to his mother by the registered gift deed. Now he wants to sell both properties and he wishes to put his Indexed cost as a Fixed Deposit in the bank and invest in the taxable capital gains in the small flats to save taxes. So the sale price of property A is Rs. 1 crore and for property B is Rs. 2 crore. So how can he buy multiple properties and save taxes on long-term capital gains? Read the answer to this question in the next paragraph.
So as the owners of the respective properties are his parents the investment has to be made in their name. The profits are going to be made on the sale of both properties which is going to be treated as long-term as the combined holding period of his and his parents for the properties is over 24 months.
According to the tax laws individuals and HUF, the property can claim the exemption from the tax on long-term capital gains on the sale of the residential property but it will only happen if the indexed capital gains are officially invested for buying to constructing and another residential house. According to the laws, the investment in the new residential house property has to be made in under two years. As we all are aware the law requires capital gains in one residential house which have to be invested in any other residential house taxpayers have an option to invest the long-term capital gains if the property is being sold.