The tax that the owner of the house has to pay at the time of making a profit from the sales of a house is an example of <u>capital gain tax</u>.
Further Explanation:
Capital Gain Tax:
Capital gain tax is a direct tax. It is levied on the capital gain earned at the time of the sales of fixed assets. Capital gain is the difference between the sales value and the purchase value of an asset. When the owner of an asset sells the asset in the market, and the sales price is higher than the purchase price, the difference is known as capital gain or profit. The government charges capital gain tax on the capital gain or profit. Capital gain tax varies from 0% to 20%. Capital gain tax differs from asset to asset.
Tax on the profit of sales of a house:
The tax on the profit of sales of a house is an example of capital gain tax.
House is a fixed asset. When the owner of the house sells it, the profit on the sales of the house is capital gain. The government would charge capital gain tax on the capital gain (profit) earned on the sales of the land.
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<u>Thus, the taxpayer has to pay capital gain tax on the profit earned from the sales of the house.
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Answer details:
Grade: High School
Subject: Taxation
Chapter: Capital Gain Tax
Keywords: Profit, tax, that you pay, from selling, a house, example of, direct tax, indirect tax, capital gain tax, taxation, capital gain, sales of the asset, profit from the sales of an asset.
