New Delhi, May 13 -- A property sale may not always generate profits, particularly in cases involving market corrections, distress sales, or properties held in areas witnessing weak price growth. If a house, plot, or commercial property is sold for a lower value than its indexed purchase cost and associated transfer expenses, the transaction will be classified as a capital loss under income tax rules.

The Income Tax Act classifies such losses under short-term or long-term capital losses depending on the holding period of the property. Taxpayers are required to furnish the complete transaction details while filing their Income Tax Return (ITR), including the purchase and sale dates, acquisition cost, sale consideration, stamp duty valuati...