(where the period of holding of the asset exceeds one year or three years depending upon the nature of asset) are taxable at 20% whereas short-term gains are taxed normally.
Specific exemptions from capital gains taxation are available for taxpayers who invest the sale proceeds in certain assets such as residential property, capital gains tax-saving bonds and specified assets and securities. The eligibility and quantum of exemption in such cases need to be checked in each individual case. Further, if the assessee is unable to invest in such schemes before the due date of filing return or actual tax filing, whichever comes earlier, the surplus money should be deposited in a special bank account under the Capital Gains Account Scheme to make payment towards the purchase of the new property in future. It is important, therefore, to carefully evaluate the tax consequences on such transactions and enjoy advantages of careful tax planning on your hard-earned money.
* The writer is managing partner at Nangia & Co. Inputs from Nikhil Goenka