Capital Gains Tax on Property Sale
Calculate your tax liability when selling property in India. Covers both short-term and long-term gains with the Budget 2024 rules.
Sale Details
Tax Calculation
Cost Inflation Index (CII) Table
The CII is used to adjust the purchase price for inflation when computing long-term capital gains under the old regime (20% with indexation). The indexed cost = (Purchase Price × CII of sale year) ÷ CII of purchase year.
| Financial Year | CII |
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Budget 2024 Changes to Property Capital Gains
From 23 July 2024, the long-term capital gains tax rate on property was reduced from 20% to 12.5%, but the indexation benefit was removed. For properties purchased before 23 July 2024, a grandfathering provision lets you choose whichever method results in lower tax — 20% with indexation or 12.5% without indexation. This calculator automatically computes both and picks the one that saves you more tax.
When Is Capital Gain Short-Term vs Long-Term?
If you hold the property for more than 24 months (2 years) from the date of purchase, the gain is long-term. If sold within 24 months, it is short-term and taxed at your income tax slab rate. For inherited property, the holding period of the previous owner is added to yours. This calculator uses financial years as a simplified approximation — for exact dates, consult your CA.
Planning to sell and reinvest? Use our Stamp Duty Calculator to estimate the cost of buying your next property, and our Affordability Calculator to check your budget for the replacement home.
Frequently Asked Questions
If the property is held for more than 24 months, the gain is classified as long-term capital gain (LTCG). Under the new rules from Budget 2024, LTCG on property sold after 23 July 2024 is taxed at a flat 12.5% without indexation benefit. Properties sold before that date could use CII indexation and a 20% rate. Short-term capital gains (holding period 24 months or less) are taxed at your income tax slab rate.
Indexation adjusts your purchase price for inflation using the Cost Inflation Index (CII) published by the Income Tax Department. The indexed cost = (Purchase Price × CII of sale year) ÷ CII of purchase year. However, for properties sold after 23 July 2024, the government removed indexation benefit and reduced the LTCG rate to 12.5%. A grandfathering provision allows you to choose the lower tax between the old (20% with indexation) and new (12.5% without indexation) methods for properties acquired before 23 July 2024.
Under Section 54, you can claim exemption on LTCG from sale of a residential property if you purchase or construct another residential house within the specified time: purchase within 1 year before or 2 years after the sale, or construct within 3 years. The exemption is limited to the capital gains amount or the cost of the new house, whichever is lower. Under Section 54EC, you can invest up to ₹50 lakh in specified bonds (NHAI/REC) within 6 months to claim exemption.
Capital gains tax applies only when you sell the inherited property, not when you inherit it. The cost of acquisition is the price at which the previous owner (from whom you inherited) originally purchased it, and the holding period includes the previous owner's holding period. So inherited property almost always qualifies as long-term capital gain.
The main legal options are: reinvest the gains in another residential property under Section 54; invest up to ₹50 lakh in Section 54EC bonds (NHAI/REC) within 6 months; deposit gains in the Capital Gains Account Scheme if you plan to buy later; or set off long-term capital losses against long-term capital gains. Consult a chartered accountant for your specific situation.