Capital Gains Tax on Property

Sell a property you have held for more than 24 months and the profit is a long-term capital gain. From 23 July 2024 the LTCG rate on property is 12.5% without indexation. Resident individuals who bought before that date may instead choose the old 20% with indexation, and pay whichever is lower.

Hold for 24 months or less and the entire gain is short-term, added to your income and taxed at your slab rate — which for most sellers is materially worse than either long-term option.

How the gain is worked out

Capital gain = sale price − (purchase price + cost of improvement + transfer expenses)

Transfer expenses include brokerage, legal fees and the cost of obtaining certificates. Improvement means capital additions — an extra room, not repainting.

Which rate

• Held ≤ 24 months — short term. The gain is added to your total income and taxed at your slab, up to 30% plus cess.
• Held > 24 months — long term at 12.5% without indexation. For property acquired before 23 July 2024, resident individuals and HUFs may compute tax under the old 20% with indexation route and pay the lower of the two. This calculator shows both.

How to pay less, legally

• Section 54 — reinvest the gain from a residential house into another residential house (buy within 2 years, or build within 3) and the gain is exempt. Capped at ₹10 crore.
• Section 54EC — invest up to ₹50 lakh of the gain in NHAI or REC bonds within 6 months, locked for 5 years.
• Capital Gains Account Scheme — if you cannot reinvest before the return due date, park the money in a CGAS account with a bank to keep the exemption alive.
• Set off losses — long-term capital losses can be carried forward eight years and set against future long-term gains.

This is an estimate, not tax advice. Surcharge and 4% health & education cess are not included, and TDS on the purchase applies at 1% where the consideration or stamp duty value is ₹50 lakh or more — section 393(1), Table Sl. No. 3(i) of the Income-tax Act, 2025, which replaced section 194-IA on 1 April 2026. Confirm with a chartered accountant before filing.

Section numbers changed on 1 April 2026. The Income-tax Act, 2025 replaced the Income-tax Act, 1961 that day, and the Ministry of Finance describes it as a re-drafting "without altering the underlying tax policy" — so the rates, holding periods and caps above are unchanged. Where we have not been able to confirm the new numbering on an official page, we name the relief and the amount rather than guess a section number. Checked 20 September 2026.

Worked example

A flat bought for ₹30 lakh and sold for ₹60 lakh after six years gives a gain of ₹30 lakh. Held over 24 months it is long term, taxed at 12.5% without indexation for transfers after 23 July 2024 — about ₹3.75 lakh before any exemption. Reinvesting the gain in another house under Section 54 can bring that to nil.

Frequently asked questions