I have sold a house; do I have to pay tax?

What is long term and short term for a house property?
If you own a property for more than three years, it will be treated as a long term capital asset. If you sell it before three years, the gains will be short term capital gains.

How is profit or capital gain calculated?
Capital gain = Sale value minus indexed cost of purchase

Indexed cost of purchase is the cost of buying the property adjusted to inflation. Indexed cost is calculated with the help of a table of cost inflation index that is provided by a notification in the official gazette each year. These are the latest indices.

What tax do I have to pay?
If you have sold your house that you lived in, for a profit, you will get an exemption on tax, if you fulfill certain conditions. The conditions are:
1. You should have owned that house for at least three years.
2. Once you sell the house, you should buy a new house within two years from the date of sale. Alternatively, if you have bought a new house within one year before the sale of the existing house, you will be eligible for tax exemption. If you are constructing a house, then you should do so within three years from the date of sale
3. The cost of the new house should be at least equal to the capital gain.

What if I don’t buy a new house?
If you don’t buy a new house, you would have to pay tax. If it is a long term capital gain, you will have to pay tax at 20 per cent. If it is a is short term, you would have to add the gains to your total income and calculate tax according to your tax slab.

I have sold my second house. What are the taxes?
If you sell your second house and want to save the capital gains tax, then you must invest the entire sales proceeds in bonds of NHAI or REC. And you must do so within six months.