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Any residential or commercial property that you own will be taxed as well. Even
if your piece of real estate is not let out, it will be considered earning rental
income and you will need to pay tax on it.
The income tax blokes are a bit easy going on this – they tax you on the
capacity of the real estate to earn income and not the actual rent. This is called
the property’s Annual Value and is the higher of the fair rental value, rent
received or municipal rent.
The Annual Value can go through a standard deduction of 30% and if you
reduce the interest on borrowed capital, then you get the value which is
charged under the head income from house property.
Any profit or gain arising from transfer of capital asset held as investments
are chargeable to tax under the head “capital gains”.
Hop over to the Long Term and Short Term capital gains article to read
more about this. Might be worth reading to see how indexation is used in
long term capital gains scenario to reduce tax outgo.
Any income that does not fall under the four heads above is taxed under the
head “income from other sources”. An example is interest income from bank
deposits, winning from lottery, any sum of money exceeding Rs. 50,000
received from a person (other than from relative, on marriage, under a will or
inheritance).