What is long-term/short-term capital gains liability arising at the time of sale?
In case of immovable property being sold within a period of 36 months from the acquisition, the gain arising there from would be short-term capital gain and liability for taxation at 30 per cent. In case the immovable property has been held for more than 36 months then the gain would be long-term capital gain and the tax thereon would be at the rate of 20 per cent.
In case of immovable property being sold within a period of 36 months from the date of purchase, the gain (if any) arising there from would be short-term capital gain and liable to tax at the marginal rate of tax (plus education cess). In case the immovable property has been held for more than 36 months, the gain would be long-term capital gain and the tax thereon would be at the rate of 20% (plus education cess). The assessee would be entitled to index the cost as per the cost inflation index. If the asset has been purchased prior to April 1, 1981, then the assessee would be entitled to substantiate the cost by the market value as on April 1, 1981 and index the cost thereafter. Is it possible for investors to set-off their capital gains tax liability by investing in capital gains bonds? Long-term capital gain liability can be set off by investing in capital gains bonds as per the provisions of Section 54EC. However, care should be taken to see that the investments are made within a pe
