Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
The rate
LTCG 12.5% without indexation; resident sellers who acquired the property before 23 July 2024 may choose 20% with indexation. STCG (24 months or less) is taxed at slab rates. Confirm per the current Finance Act.
Saving the tax
Reinvest under Section 54 / 54EC to reduce or remove the gain.
Working the gain, and the buyer's TDS
The taxable gain is the sale price less the indexed (or actual, post-July-2024) cost and the cost of any improvements, plus selling expenses like brokerage. For a long-term gain you then choose between the routes: the 12.5%-without-indexation rate, or — if you’re a resident who bought before 23 July 2024 — the 20%-with-indexation rate, whichever is lower, which is genuinely worth computing both ways for an older property where indexation is large. Held 24 months or less, the whole gain is short-term and taxed at your slab rate, with no reinvestment exemptions. Two transactional points matter. The buyer must deduct 1% TDS under Section 194-IA on a sale of ₹50 lakh or more (much higher rates apply if the seller is an NRI, under Section 195), which you then adjust against your final tax. And if you plan to reinvest under Section 54 or 54EC but haven’t done so by the filing due date, park the gain in the Capital Gains Account Scheme to keep the exemption alive. Keeping the purchase deed, improvement bills and sale deed lets you compute the gain correctly and claim the right exemption. Confirm the rates and the indexation option per the current Finance Act.