Tips for Selling Your Property
Before you plan to sell your house, you should question yourself on a few issues related to selling your house in India. These are as follows:
1. Whether you have all the relevant property related documents?
Check whether you have all property(house on sale) related documents showing a clear title, taxation, RBI Form IPI 7 that declares immovable property and bank certificate of purchase price. In case you have been gifted or inherited this house/property (on sale) then make sure that it has a clear title.
2. Check the background of your buyer
When you are looking for the buyers of your property/house, you must consider their origin. This implies you must take care that your prospective buyer is not a citizen of any of the debarred countries like Pakistan, Bangladesh, Afghanistan, Bhutan, Sri Lanka, China, Iran or Nepal.
3. How to assess your selling?
There is a cost escalation of property prices every year. The cost escalation of the property occurs annually and the Cost Inflation Index (CII) provides the cost escalation. This CII figure is estimated according to the government policies. Sale price=(CII figure) times (the purchase price). Anything that is greater than this sale price is your profit. This profit is actually your capital gain in selling your property according to cost escalation.
In case if you sell your property before 36 months of your purchase period, the gain is termed as short-term gain. This short term gain is also taxable. On the contrary, if you sell your property after 36 months of your purchase period, the gains will be termed as long-term gains. These long term gains are taxed @ 20% with a surcharge of 10% and 2% education cess.
4. How to save your tax on sale of property?
The best way out to save on tax is to re-invest your money in the purchase of property or government bonds within a period of 6 months. You have another option to avail DTAA (Double Taxation Avoidance Agreement) that allows you to pay lower taxes in your country of residence.
5. Make sure that your money is safe
In order to have a safe and secure sale of your property, you must follow the guidelines of property selling. These guidelines are available at the Ministry of Overseas Indian Affairs web site. You can then decide the sale price of your property and have a safe and secure sale transaction by following the latest rules.
All the above mentioned guidelines, if followed, will undoubtedly land you in safe and secure sale transaction.