Sold house? Follow these rules to avoid tax notice

When a residential house is sold, most taxpayers are aware that the resulting capital gain is chargeable to tax under Section 45 of the Income-Tax Act, 1961 in the assessment year relevant to the financial year in which the sale takes place. They also generally know that the gain is treated as long-term or short-term depending on the period of holding. In the case of a residential house, the gain is regarded as long-term if the house is sold after being held for more than 24 months; otherwise, it is treated as short-term.