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Income tax rules regarding reinvestment
September 1 2008 , 04:46 PM   #1
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Income tax rules regarding reinvestment

Hi All,
Can someone please confirm what are the rules regarding taxation of money from a real estate property?
I need clarification regarding the following points-
1- What is the long term and short term rate?
2-Is the paying off of another mortgage tax deductible?

any other information or link that can help.

Thanks a lot
Rahul
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March 1 2012 , 06:22 PM   #2
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Quote:
Originally Posted by rahul_capri
Hi All,
Can someone please confirm what are the rules regarding taxation of money from a real estate property?
I need clarification regarding the following points-
1- What is the long term and short term rate?
2-Is the paying off of another mortgage tax deductible?

any other information or link that can help.

Thanks a lot
Rahul
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March 8 2012 , 12:36 PM   #3
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Quote:
Originally Posted by rahul_capri
Hi All,
Can someone please confirm what are the rules regarding taxation of money from a real estate property?
I need clarification regarding the following points-
1- What is the long term and short term rate?
2-Is the paying off of another mortgage tax deductible?

any other information or link that can help.

Thanks a lot
Rahul
Rahul: Your question is not clear. Do you want to ask about rental income or capital gain from sale of the property? If it's capital gain - then you've to first identify whether the gain is long term (for holding property more than 3 years) or short-term. If it's long term - you'll indexation benefit, rate is 20%, and you'll be eligible to invest in another property to completely save the tax. If it's short term, no such benefit - entire gain will be taxable 30.9% (subject to your slab rate). Yes - you may adjust the gain with capital loss (if any). for capital gain - no mortgatge taxes are deductible.

Hope it clarifies.
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