Capital Gains Tax Calculator — Property Sale India 2026

The Finance Act 2024 (effective July 23, 2024) changed the LTCG rate on immovable property from 20% (with indexation) to 12.5% (without indexation). Key rule: properties purchased BEFORE July 23, 2024 can use either method — whichever results in lower tax. Properties purchased ON or AFTER July 23, 2024 can only use the new 12.5% rate without indexation. For older properties with high indexation benefit (bought 10+ years ago during high inflation), the old 20% + indexation route often results in lower tax.

Indexation uses the Cost Inflation Index (CII) published by CBDT to inflate your purchase price to account for inflation over the holding period. Indexed cost = Purchase price × (CII in sale year / CII in purchase year). Example: bought in FY 2010-11 (CII 167) and sold in FY 2024-25 (CII 363): factor = 363/167 = 2.17×. A ₹50L purchase becomes ₹1.085Cr indexed cost — dramatically reducing the taxable gain. For long-held properties (10+ years), indexation typically saves ₹5–15L in tax vs the new 12.5% regime.

Section 54 allows you to claim exemption on LTCG (not the full sale price — unlike Section 54F) by reinvesting the LTCG amount in a new residential property. Rules: (1) You must buy the new house 1 year BEFORE or 2 years AFTER the sale, or construct within 3 years. (2) The exemption is capped at the LTCG amount — not the reinvestment. (3) You cannot own more than 2 houses (after Budget 2023, capped at ₹10Cr in reinvestment for Section 54 if LTCG > ₹2Cr). (4) If you sell the new property within 3 years, the exemption is revoked. If you can't reinvest immediately, deposit the LTCG in a Capital Gains Account Scheme (CGAS) bank account before July 31 of the assessment year.

Section 54EC allows exemption by investing LTCG in specified bonds (currently NHAI, REC, PFC, IRFC). Rules: (1) Must invest within 6 months of sale — strict deadline. (2) Maximum ₹50 lakh per financial year. (3) Lock-in period: 5 years (increased from 3 years since 2018-19). (4) Interest earned on bonds is fully taxable at slab rate (currently around 5–5.5% p.a.). Use 54EC bonds when: you don't need to buy a new property, want certainty (no property search needed), or the LTCG is ≤ ₹50L. For LTCG > ₹50L, combine 54EC bonds (₹50L) with Section 54 reinvestment for the balance.

STCG arises when a property is sold within 24 months of purchase. Unlike LTCG, no indexation benefit applies and no Section 54 or 54EC exemptions are available (only Section 54 if you reinvest in another property within a year). The gain (Sale price − Purchase price − Improvement cost − Sale expenses) is simply added to your gross income and taxed at your applicable slab rate — 5%, 20%, or 30% + cess. This makes STCG significantly more expensive than LTCG for most taxpayers. If possible, always wait for the 24-month threshold to convert STCG to LTCG.

Section 54EC bonds are government-backed bonds issued by NHAI, REC, PFC, and IRFC that allow you to claim LTCG exemption. You must invest the LTCG amount (not the full sale price) within 6 months of the property sale date — this is a hard deadline with no extensions. The maximum investment is ₹50 lakh per financial year. These bonds have a 5-year lock-in with no premature withdrawal. The interest rate is approximately 5–5.5% p.a. (fully taxable at your slab rate). One important strategy: if a property is sold in January–March, you can potentially invest up to ₹1 crore in 54EC bonds — ₹50L before March 31 (current FY) and ₹50L after April 1 (next FY), both within the 6-month window.

Section 54 allows you to claim LTCG exemption by reinvesting the capital gains amount into a new residential property. Key rules: (1) Purchase a new house within 1 year before or 2 years after the sale date, or construct within 3 years. (2) Only residential property qualifies — not commercial property, plots, or land. (3) Post-Budget 2023, the reinvestment amount is capped at ₹10 crore if your LTCG exceeds ₹2 crore. (4) You cannot sell the new property within 3 years, or the exemption is reversed. (5) If you cannot buy or construct immediately, deposit the LTCG in a Capital Gains Account Scheme (CGAS) at a designated bank before the ITR filing deadline. The amount deposited in CGAS must be utilised within the prescribed timelines, otherwise the exemption is revoked.

For jointly owned property, each co-owner is taxed on their share of the capital gain in proportion to their ownership. If two co-owners hold 50% each, the gain is split equally. Each co-owner computes their own indexed cost of acquisition based on the CII for their respective purchase year, and each can independently claim Section 54 or 54EC exemption on their share. For example, a property sold for ₹2 Cr with ₹60L LTCG in a 50:50 ownership means each owner has ₹30L LTCG. Each can separately invest up to ₹50L in 54EC bonds or reinvest in a new property under Section 54. This effectively doubles the available exemptions for the same property sale, making joint ownership a legitimate tax planning tool.

NRIs face special rules for property capital gains in India. LTCG is taxed at 12.5% (new regime, no indexation) or 20% (old regime with indexation) for pre-July 2024 purchases — same rates as residents. However, the buyer must deduct TDS at 12.5% of the sale consideration (not just the gain) for LTCG, or 30% for STCG. This often results in TDS far exceeding the actual tax liability. The NRI can file an ITR to claim a refund, or apply for a lower TDS certificate from the Assessing Officer before the sale using Form 13. Section 54 and 54EC exemptions are available to NRIs on the same terms. Repatriation of sale proceeds requires a CA certificate (Form 15CB) and a remittance application (Form 15CA). DTAA benefits may apply based on the NRI's country of residence.

For inherited or gifted property, the cost of acquisition is the cost at which the previous owner (from whom you inherited) originally purchased the property. The holding period also includes the previous owner's holding period. For example, if your father bought a property in FY 2005-06 for ₹20L and you inherited it in 2020, your cost is still ₹20L and your holding period starts from 2005-06. You can claim indexation from the original purchase year (CII of FY 2005-06 = 117), significantly boosting your indexed cost. If the property was acquired before April 1, 2001, you can use the Fair Market Value (FMV) as on April 1, 2001, as your cost of acquisition. For very old ancestral properties, getting a registered valuer's report for the 2001 FMV is highly recommended.

Yes, but with conditions. Budget 2024 introduced a new 12.5% LTCG rate without indexation for property sales. However, properties purchased before July 23, 2024 get a grandfathering benefit — you can compute tax under both the old regime (20% with indexation) and the new regime (12.5% without indexation), and pay whichever is lower. Properties purchased on or after July 23, 2024 can only use the new 12.5% flat rate with no indexation. For long-held properties bought 10–15+ years ago, indexation frequently results in lower tax because the CII has risen significantly (e.g., CII 2001-02 was 100, CII 2024-25 is 363). This calculator automatically compares both methods and picks the one that saves you more tax.