Immovable properties i.e. plot of land, residential flats or house, commercial properties etc. are treated as Capital Assets u/s 2(14) of the Income-tax Act, 1961 (‘the Act’) and accordingly gains arising from the transfer of immovable property is chargeable to income tax.
Further, it must be noted that immovable property which is classified as Rural Agricultural land as per the provisions of the Act, is not treated as Capital asset and accordingly gains arising from the transfer of same is not chargeable to tax.
The Capital gains are segregated into long term capital gains and short term capital gains in the following manner :-
|Period of Holding of immovable property||Type of Gain arising on transfer|
|For less than or equal to 36 months||Short Term|
|For more than 36 months||Long Term|