Income Tax: If you want to sell your old house and buy a new one, then know how you can save tax

Breaking News (Bureau).  Selling or buying any property also increases your income. This also increases your tax scope and you have to pay tax accordingly. In such a situation, if you are planning to sell your old house and buy a new one, then first you need to know about the income tax rules related to it. If you do not pay tax according to your tax slab, the Income Tax Department can also take action against you.

You have to pay tax on buying or selling property. But if you sell your ancestral property, then different income tax rules apply on it. Today, along with the rules for selling or buying property, we are also telling you ways to save tax on it.

Tax rules for selling ancestral property

Let us tell you that you do not have to pay any tax on keeping inherited property. However, in some states, you may be charged a fee for the documentation of ancestral property. But it has nothing to do with tax. On the other hand, if you earn money by renting out ancestral property, then it is considered as your income. Therefore, you will have to pay tax on it.

How much tax will be levied on selling the property?

Whenever you sell ancestral property, tax is levied on it according to long term or short term, which is called capital gain tax. On selling the property, tax is calculated according to the capital gain and you have to pay tax on that basis. 

Let us tell you that you also get the option to save tax on this. To save tax on the capital gain you get on selling your ancestral property, you can invest in some other property.

Include capital gains in ITR

When you sell a family property, it is necessary to show the income earned on it in the income tax return. If there is a capital gain on selling any property, it must be shown in the ITR. If this is not done, the Income Tax Department can take action for tax evasion. To avoid this, it is necessary for you to pay income tax on capital gain.