Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
The 24-month rule
For land and buildings, the long-term threshold is more than 24 months. Cross it and the gain is long-term, taxed at 12.5% (from 23 July 2024). Sell within 24 months and it is short-term, taxed at your slab rate with TDS up to 30%.
Counting from when
The period runs from the date of acquisition. For inherited property, you include the previous owner’s holding period, so it is almost always long-term. Holding periods and rates change with the Finance Act — confirm before selling.
Why it matters — an example
Example: you bought a flat 20 months ago and a buyer appears. Selling now makes the gain short-term, taxed at slab rates (up to 30%) with heavy TDS. Waiting just over four more months makes it long-term at 12.5% — often a large saving in both tax and blocked TDS. The timing decision can be worth lakhs. The holding period also decides whether the reinvestment exemptions are even available — Section 54 and 54EC only apply to long-term gains, so a short-term sale is taxed at slab rates with no shelter at all. That makes crossing the 24-month line doubly valuable: a lower rate and access to the exemptions. Our NRI property service can model the difference.