Capital gains on the sale of property
Sold a house, a flat or a plot? This works out the long-term gain and the tax on it — comparing 12.5% without indexation against 20% with it, handling property bought before 2001 or inherited, and telling you how much you would have to reinvest to pay nothing. Nothing you type leaves your browser.
1 · What was sold, and by whom
2 · How you got it
Including stamp duty and registration.
≈ ₹40.00 lakh
3 · Improvements
Capital additions only — another floor, a boundary wall. Not repainting. Each one is indexed from the year it was spent, which is why they go in separately.
4 · The sale
≈ ₹1.20 crore
If it is more than 110% of the price, section 78 substitutes it for the price.
Brokerage, legal fees — what it cost you to sell.
Each co-owner computes separately on their own share.
Salary, rent, interest and so on, before this sale. Only needed to work out surcharge, which starts above ₹50 lakh of total income.
How is capital gains tax on property calculated?
Take the sale price, subtract what it cost you to sell, subtract what you paid for the property and any capital improvements, and what is left is the gain. Held for more than 24 months, it is long-term and taxed at 12.5% plus 4% cess. Held for less, it is added to your income at your slab rate.
Is it 12.5% without indexation, or 20% with it?
Both are computed, and you pay the lower — but only if you are a resident individual or HUF and the land or building was acquired before 23 July 2024. It is not a choice you make on your return: section 197(3) works out both and ignores the excess automatically. Property bought after that date has one rate, 12.5%, and no indexation at all.
What if the property was bought before 2001, or inherited?
For property acquired before 1 April 2001 you may use its fair market value on that date instead of the actual cost — capped at the stamp duty value on 1 April 2001. For inherited or gifted property the law uses the previous owner’s cost, and their holding period counts towards your 24 months. Improvements made before April 2001 are ignored entirely.
How much must I reinvest to pay no tax?
It depends on what you sold. Sell a house and reinvest in a house, and you need to put back the gain. Sell land or a commercial property and you must reinvest the entire net sale price — the whole thing, not just the profit — or the relief is proportionate. That difference surprises most sellers, and the tool states your number for both.
The section numbers changed in April 2026
The Income-tax Act 2025 renumbered these provisions with effect from 1 April 2026. Section 54 became section 82, 54EC became 85, 54F became 86, and the rate provision, section 112, became section 197. Section 112 now covers something else entirely — the carry-forward of business losses — so a guide still citing it is pointing at the wrong provision. This tool labels your computation with whichever numbering applied on your sale date.
Selling as an NRI?
It is a different transaction. Tax is withheld on the whole sale price under section 393(2), not 1% on the gain, and there is no ₹50 lakh threshold. The 20%-with-indexation option is not available. The remedy is a lower or nil deduction certificate under section 395(1), applied for on Form No. 128 — what used to be Form 13 — and it has to be applied for before completion. It cannot be obtained afterwards; once the buyer has paid, the only route left is a refund claim months later. The buyer can apply too, under section 395(2), where only part of the price is chargeable. Afterwards the buyer files Form No. 144 (formerly 27Q) and issues Form No. 131 (formerly 16A), and repatriation runs on Forms 145 and 146 (formerly 15CA and 15CB). Select “non-resident” above and the tool explains what follows rather than guessing at a number.
Not yet reviewed by a chartered accountant. The rules here were read from the bare Income-tax Act 2025 rather than from secondary sources, and the surcharge rates from the Finance Act 2026 — but the review is still outstanding. Surcharge is worked out only if you enter your other income, and marginal relief just above a threshold is not applied. Treat the figure as an estimate and check it before you file.
Buying rather than selling? The buyer has to deduct TDS and file for it — our walkthrough of Form 141 covers that side, screen by screen.
Questions people ask
- How long must I hold property for the gain to be long-term?
- More than 24 months. At exactly 24 months or less it is short-term and taxed at your slab rate instead of the 12.5% long-term rate.
- Can I still claim indexation on a property sale?
- Only if you are a resident individual or HUF and the land or building was acquired before 23 July 2024. Then the tax is capped at the lower of 12.5% without indexation and 20% with it. Property acquired later gets 12.5% and no indexation.
- How is inherited property treated?
- The previous owner’s cost becomes your cost, and their holding period counts towards your 24 months. Enter the date they acquired it and what they paid, not the date you inherited it.
- What if the circle rate is higher than my sale price?
- If the stamp duty value exceeds 110% of the price, the stamp duty value is substituted as the sale consideration. Inside that 10% tolerance the actual price stands.
- How much do I have to reinvest to pay no capital gains tax?
- Sell a residential house and reinvest in another, and you need to reinvest the gain. Sell land or commercial property and you must reinvest the entire net sale price, not just the gain, or the exemption is proportionate.
- Does this include surcharge?
- Yes, if you enter your other income for the year — surcharge is banded on total income, so it cannot be worked out without it. It starts above ₹50 lakh, and the rate charged on the capital gains portion is capped at 15% even where the band is higher. Marginal relief just above a threshold is not applied, because working it out needs your full slab tax.