Property held for more than 24 months is taxed on long-term gains at 12.5% without indexation. For property bought before 23 July 2024, resident individuals and HUFs can choose the lower of 12.5% without indexation or 20% with indexation. Reinvestment exemptions can reduce the tax.
Short term vs long term
If you sell a house or plot within 24 months of buying, the gain is short term and taxed at your slab rate. After 24 months it is long term.
The rate
At the time of writing, long-term gains on property are taxed at 12.5% without indexation. For property acquired before 23 July 2024, resident individuals and HUFs can compare this with 20% on an indexed basis and pay the lower amount.
Ways to reduce it
You can reduce or defer the tax by reinvesting in another residential house within the prescribed period, or by investing in specified bonds within six months, up to ₹50 lakh. The conditions are strict, so plan before you sell.
Other points
The buyer deducts 1% TDS on a sale of ₹50 lakh or more. The Income-tax Act, 2025 applies from 1 April 2026 and renumbers sections, so use your accountant for the correct provisions. This is general information, not tax advice.
Questions people ask
Is inherited property taxed differently?
Should I plan the sale before the financial year ends?
Want this checked for your property?
Send us the project name, location and your budget on WhatsApp. We will tell you what to verify before you pay anything.
Chat on WhatsApp
