Returns from real estate classify as long term in two years. Long term capital gains are taxed at 20.8 per cent with indexation benefits. Short term gains are taxed as per slab rate. Since property costs and capital gains may be high, selling them as long term assets provides the seller indexation benefits, which can significantly lower the tax on such gains.
Tax Efficiency & Rating: 4/5 Returns generated is tax-exempt during accumulation stage. The interest in NSC is also reinvested thereby providing additional benefits under Section 80C. The interest is taxed only on maturity.
Tax Efficiency & Returns Rating: 3/5 for regular investors; 3.5/5 for senior citizens.