Trust Accounting Services

 

The benefit of indexation is allowed to set off the impact of inflation from the gains made on sale of the property so that the actual gains on property will be taxed. This is based on the logic that value of money decreases constantly because of inflation and hence, it is unfair to tax a long term property holder for the nominal gains accruing to him only because of inflation. When you sell your property that is owned by you for more than three years, any gain arising from such sale will be considered as long term capital gain. Trust Accounting Services  Long term capital gain is calculated as the difference between net sales consideration and indexed cost of property. The benefit of indexation is allowed to set off the impact of inflation from the gains made on sale of the property so that the actual gains on property will be taxed. This is based on the logic that value of money decreases constantly because of inflation and hence, it is unfair to tax a long term property holder for the nominal gains accruing to him only because of inflation. An Income tax return (ITR) is a form used to file information about your income and tax to the Income Tax Department. The tax liability of a taxpayer is calculated based on his or her income. In case the return shows that excess tax has been paid during a year, then the individual will be eligible to receive a income tax refund from the Income Tax Department.