Capital Gains Tax – Property
Calculate LTCG tax on property sale. Includes CII-based indexation, Section 54/54EC exemptions and net tax after reinvestment. STCG (held under 24 months) taxed at slab rate.
Capital Gains Tax — Property
LTCG 20% + indexation · STCG at slab · Sec 54 & 54EC exemptions
LTCG reinvested in new residential property (max Rs 10Cr)
Invested in NHAI/REC bonds within 6 months (max Rs 50L)
Estimates only. Property LTCG includes stamp duty & registration in cost. Consult a CA for exact computation.
Selling a property held over 24 months? LTCG tax is 20% with indexation. Buying a new residential property within 2 years (or constructing within 3 years) exempts the LTCG u/s 54. Investing up to Rs 50L in 54EC bonds (NHAI/REC) within 6 months gives additional exemption — effectively eliminating most property LTCG tax.
Capital Gains Tax on Property Sale in India
When you sell a property, the profit is taxed as a capital gain. The applicable tax rate depends on how long you held the property. Property held for more than 24 months qualifies as a long-term capital asset, attracting LTCG tax at 20% with the benefit of CII-based indexation. Property sold within 24 months is short-term, taxed at your income slab rate.
How indexation reduces your LTCG on property
Indexation adjusts your purchase cost upward for inflation using the Cost Inflation Index (CII). For a property bought at Rs 30 lakh in FY 2015-16 (CII 254) and sold in FY 2025-26 (CII ~389), your indexed cost becomes approximately Rs 45.9 lakh. Only the difference between Rs 80L sale price and Rs 45.9L indexed cost (Rs 34.1L) is taxable — not the Rs 50L raw gain. This saves significant tax on long-held property.
How to legally avoid LTCG tax on property
Section 54 allows full LTCG exemption if you reinvest the gains in a new residential property — purchased within 2 years or constructed within 3 years of the sale. Section 54EC allows investment of up to Rs 50 lakh in NHAI or REC bonds within 6 months to claim exemption. If you cannot reinvest immediately, deposit the gain in a Capital Gains Account Scheme (CGAS) before ITR filing to preserve the exemption claim.
The Rs 10 crore exemption cap
From 1 July 2023, the Section 54 and 54F exemption is capped at Rs 10 crore. For LTCG above Rs 10 crore, even full reinvestment in a new residential property will not exempt the excess gain. This cap primarily affects high-value urban property transactions.