Ans: This is regardless of whether the entire sale proceeds are received in the same financial year.
For example, if you sell a property on 31st March 2023 and receive the entire sale proceeds on 1st April 2023, the Capital Gains Tax (CGT) will be payable in the financial year 2023-24.However, if you receive the sale proceeds in instalments, you can choose to pay the CGT on the instalments received in each financial year.
To calculate the CGT, you will need to determine the cost of acquisition of the property and the sale proceeds. The cost of acquisition will include the purchase price of the property, as well as any expenses incurred on its improvement. The sale proceeds will include the amount received from the sale of the property, as well as any other benefits received, such as a waiver of stamp duty.
Once you have determined the cost of acquisition and the sale proceeds, you can calculate the CGT using the following formula:
CGT = Sale proceeds – Cost of acquisition
The CGT rate will depend on the type of property sold and the period of time for which it was held. Long-term capital gains on the sale of property are taxed at a rate of 20.8% (including cess). Short-term capital gains on the sale of property are taxed at the taxpayer’s applicable income tax slab rate.
To pay the CGT, you can file a tax return and pay the tax due. You can also choose to pay the tax in advance using the Challan 280 form.