How buying a new home can save you capital gains tax on shares, mutual funds
SummaryLong-term capital gains on shares, mutual funds, gold will be exempt from tax if used to purchase a residential property
NEW DELHI : For many investors, buying a house is the fulfilment of a long-cherished financial goal. And, it comes with several incentives. For one, the Income Tax (IT) Act provides homebuyers several tax sops to encourage and assist people to own a residential house. These tax breaks are given in the form of deductions on home loans and the rental income. A bigger incentive is the exemption on capital gains made from a house property if the gains are used to purchase another property. That’s not all. If you use the sale amount of your other capital assets, including shares (both listed and unlisted), mutual funds and gold, to buy a residential property, the long-term capital gains made on the said asset will also be exempt from tax. This tax exemption is available under section 54F.