Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
The 2024 change
Before 23 July 2024, long-term property gains were taxed at 20% with indexation — your purchase cost was inflated by the cost-inflation index, reducing the gain. From that date, the regime is 12.5% without indexation: a lower rate, but no inflation adjustment.
The grandfathering choice
For property acquired before 23 July 2024, resident individuals and HUFs may choose the lower of the two methods — 12.5% without indexation or 20% with indexation. This protects people who bought long ago, where indexation materially lowers the gain. This choice is not available to NRIs or to companies — confirm your eligibility.
A worked example
Example: a resident bought a flat in 2005 for ₹20 lakh and sells in 2026 for ₹1 crore. With indexation the cost might rise to, say, ₹55 lakh (gain ₹45 lakh at 20% = ₹9 lakh); without indexation the gain is ₹80 lakh at 12.5% = ₹10 lakh — so here the 20%-with-indexation route is better, and they can pick it. For recent purchases, only the 12.5% route exists. Our team can compute both.