Property Capital Gains Calculator — 12.5% Flat vs 20% With Indexation
Since 23 July 2024, long-term capital gains on property are taxed at 12.5% without indexation. But if you bought the property before that date, you (resident individuals/HUFs) can choose the old method — 20% with indexation — and pay whichever is lower. This calculator computes both and picks the winner. Property held 24 months or less is short-term: gains are taxed at your slab rate.
🏘️ Calculate Tax on a Property Sale
The July 2024 Rule Change, Explained
Budget 2024 cut the LTCG rate on property from 20% to 12.5% but removed indexation — the inflation adjustment that used to shrink taxable gains on long-held property. After protests, a grandfathering clause was added: for property acquired before 23 July 2024, resident individuals and HUFs compute tax both ways and pay the lower. This regime continues unchanged in FY 2026-27.
| Scenario | Which usually wins |
|---|---|
| Bought recently (2–5 years ago), strong price growth | 12.5% flat — indexation hasn't accumulated much |
| Bought 10+ years ago, moderate growth | 20% indexed — indexation may wipe out most of the gain |
| Property roughly doubled in ~7 years | Close call — run both, the calculator picks for you |
| Bought on/after 23 July 2024 | No choice — 12.5% flat only |
Ways to Reduce or Eliminate the Tax
- §54 — buy another house: reinvest the gain in one residential property in India within 2 years (3 if constructing; or 1 year before the sale) and the reinvested gain is exempt. Capped at ₹10 crore.
- §54EC — capital gains bonds: invest up to ₹50 lakh of gains in REC/NHAI/IRFC bonds within 6 months; 5-year lock-in, exemption on the invested amount.
- Capital Gains Account Scheme: can't reinvest before your ITR deadline? Park the gain in a CGAS account to preserve the §54 exemption while you find a property.
Short-term sales (held ≤ 24 months) skip all of this: the gain simply adds to your income at slab rates — check the damage with our income tax calculator.
Section 54 exemption explained
The Section 54 exemption is the most-used way to pay zero capital gains tax on a house sale. Reinvest the capital gain (not the whole sale value) into one residential property in India — bought within one year before or two years after the sale, or constructed within three years — and that reinvested gain becomes exempt, capped at ₹10 crore. If you can't reinvest before your ITR filing deadline, park the gain in a Capital Gains Account Scheme (CGAS) deposit to keep the claim alive. Remember that when you buy the new property, you'll also pay stamp duty and registration — budget 4–7% of its value on top of the purchase price.
NRI capital gains and TDS on property sales
NRIs selling Indian property pay the same headline rates (12.5% LTCG, slab rates for STCG) but with two key differences. First, NRIs cannot use the 20%-with-indexation option — that is reserved for residents. Second, and more importantly, the buyer must deduct TDS on the entire sale value (not just the gain): 12.5% plus surcharge and cess for long-term sales, ~30%+ for short-term. The NRI then claims a refund of any excess through their ITR, or applies to the Income Tax Department in advance for a lower-deduction certificate (Form 13) to avoid locking up cash. This TDS on the gross sale value is the single biggest surprise for NRI sellers, so plan for it before signing.