Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
What changed in 2024
Before 23 July 2024, long-term property gains were taxed at 20% with indexation (which inflated your cost to reduce the gain). From that date, the rate is 12.5% without indexation — a lower rate, but no inflation adjustment to your cost.
The resident-only choice
To soften the change, resident individuals and HUFs who acquired property before 23 July 2024 can choose the better of 12.5% (no indexation) or 20% (with indexation). This grandfathering option is not extended to NRIs — an NRI’s long-term property gain is simply 12.5% without indexation. This is a developing area — confirm the current position for your facts.
A worked example
Example: an NRI sells in 2026 a flat bought in 2010. The gain is computed as sale price minus actual cost (no indexation), taxed at 12.5%. A resident in the same position could test 20%-with-indexation and pick whichever is lower — an option the NRI does not have. Reinvestment under Section 54 or 54EC can still reduce the gain. Because the NRI loses both the 20%-with-indexation comparison and the resident rebates, the exemptions do more of the heavy lifting for an NRI than for a resident — so reinvestment planning is where most of the saving is found. Keep clear evidence of your original cost, since without indexation the cost figure directly drives the gain. Our NRI property service can compute it.