FAQ · Taxation
The Finance Act 2024 reset how property gains are taxed in India, and most sellers are still working from outdated assumptions. This page answers the tax questions that determine what an owner actually nets on sale.
Model the tax outcome before you list the property, not after the sale deed is signed — the exemption windows are time-bound and cannot be claimed retroactively.
Following the Finance Act 2024, long-term capital gains on property sold are taxed at a flat 12.5% without indexation benefit, for transfers made on or after 23 July 2024.
Property held for more than 24 months before sale qualifies as long-term. Property sold within 24 months of purchase is taxed as short-term capital gains at the seller's applicable slab rate.
Under Section 194-IA, the buyer must deduct 1% TDS on the sale consideration (or stamp duty value, if higher) for any property transaction exceeding ₹50 lakh, and deposit it against the seller's PAN.
For property acquired before 23 July 2024, resident individuals retain a choice between 12.5% without indexation and 20% with indexation, whichever results in lower tax; property acquired after that date follows the 12.5% flat rate only.
Reinvesting the gain in another residential property under Section 54, or in specified capital gains bonds under Section 54EC within the prescribed timelines, can substantially reduce or eliminate the tax liability.
No. Municipal property tax is an annual charge paid to the local authority for owning property. Capital gains tax is a one-time income tax on the profit made when the property is sold.
Yes. Rental income is taxed annually under "income from house property" at slab rate after standard deduction, while capital gains tax applies only in the year of sale, on the profit realised.
The original purchase agreement, payment proof, cost of any capital improvements, sale agreement, and stamp duty valuation at both purchase and sale are needed to compute the taxable gain accurately.