June 23, 2005
number of readers have been sending us queries on capital gains related to the selling of their home.
A typical query would be that they booked an apartment a few years ago for which they took a loan. Now that they are earning more, they would like to sell it for a bigger apartment.
The first question that comes to mind: what about capital gains? Here are some of the most frequently asked questions on capital gains.
1. Do I have to pay capital gains tax if I sell my home?
When you sell any asset you own (house, land, shares, mutual fund units, gold, debentures, bonds) and make a profit, it is known as capital gain. The tax you pay on this profit is called the capital gains tax.
If you make a loss (you sell at a lower price than what you bought it for), you incur a capital loss.
House property is a capital asset. Its sale attracts capital gain or loss. Depending on how long you owned the house before you sold it, the money you make on the sale woul