Real Estate Tax Return Filing Services

Capital gains from the sale of property must be reported in ITR-2 for individuals who have no business income. If the property seller is a business entity or has business income, ITR-3 is used. ITR-1 cannot be used if there are capital gains from property sale. The choice of form also depends on whether you are an individual, HUF, or company.

The Finance Act 2024 reduced the long-term capital gains tax rate on property from 20% with indexation to 12.5% without indexation for transfers on or after July 23, 2024. However, for properties acquired before July 23, 2024, taxpayers can compute tax at both 12.5% without indexation and 20% with indexation and pay whichever results in the lower tax liability. The holding period for LTCG classification remains 24 months.

Section 54 allows individuals and HUFs to claim exemption on long-term capital gains from selling a residential house, provided the gains are reinvested in purchasing another residential property within one year before or two years after the sale, or constructing one within three years. The exemption amount is the lower of the capital gains or the cost of the new property. It is claimed in Schedule CG of ITR-2 or ITR-3. If reinvestment is not complete before the filing date, the unutilised amount must be deposited in the Capital Gains Account Scheme before filing.

Yes. Under Section 194-IA, the buyer of immovable property valued at Rs 50 lakh or above must deduct TDS at 1% of the sale consideration at the time of payment. The buyer files Form 26QB online within 30 days and issues Form 16B to the seller. The seller then claims this TDS credit when filing their income tax return. For NRI sellers, the TDS rate is significantly higher under Section 195 and varies based on the nature and quantum of capital gains.

Each let-out property is taxed separately under the House Property head. Gross rent is the higher of actual rent and the annual letting value. From this, municipal taxes paid and a standard deduction of 30% on net annual value are deducted. Interest on home loan is fully deductible for let-out properties under Section 24(b) without any cap. If you own more than two properties and none are on rent, one is deemed to be let out at notional rent for tax purposes.

Yes. We file income tax returns for real estate developers operating as sole proprietors, partnership firms, LLPs, and private limited companies. Builder income from development activity is business income, and we handle revenue recognition under the project completion and percentage completion methods, inventory valuation of unsold units, GST reconciliation with income tax, and Section 44AB tax audit where turnover exceeds the threshold. Corporate tax returns under ITR-6 for developer companies are a regular part of our engagement.