Selling property is often when people meet the tax system in a big way for the first time. Planning ahead, ideally before you sign the sale agreement, can make a large difference. Here are the basics; please confirm details for your case with a chartered accountant, as rules change.
Short term or long term?
- Short-term capital gain: property held for 24 months or less. The gain is added to your income and taxed at your slab rate.
- Long-term capital gain (LTCG): property held for more than 24 months.
LTCG rates after July 2024
For transfers on or after 23 July 2024, LTCG on property is generally taxed at 12.5% without indexation. For resident individuals and HUFs who bought before that date, the law allows them to compute tax under the older method (20% with indexation) if that is lower. Your CA can compare both.
Exemptions that can reduce tax
- Section 54: sell a residential house and buy or build another residential house in India within the time limits, and the gain invested is exempt (subject to an overall cap).
- Section 54F: sell any other long-term asset, such as a plot or shop, and invest the net sale amount in a residential house.
- Section 54EC: invest up to ₹50 lakh of the gain in specified bonds within six months, held for five years.
- If you cannot reinvest before the tax return date, deposit the amount in the Capital Gains Account Scheme at a bank.
TDS on sale
The buyer deducts TDS: 1% for a resident seller where the price is ₹50 lakh or more, and higher rates for NRI sellers. Make sure the buyer deposits it and gives you Form 16B, so you get credit.
Stamp value matters
If you sell below the stamp duty (DLC) value beyond the allowed tolerance, the stamp value may be treated as the sale price for tax. Keep sale documents consistent with the real deal.
Tip:Collect purchase deeds, improvement bills and brokerage receipts before you sell. They reduce your taxable gain.
Plan the sale with us
Our advisors can help you price the property right with AI Valuation, find a buyer and coordinate with your CA so the sale and reinvestment are timed well.
Frequently asked questions
What is the LTCG tax on property sold in 2026?
Generally 12.5% without indexation; resident individuals and HUFs with property bought before 23 July 2024 can choose the older 20% with indexation if lower.
How can I avoid capital gains tax on a house sale?
By reinvesting in a residential house under Section 54 or in specified bonds under Section 54EC, within the conditions and limits.
Who deducts TDS on property sale?
The buyer deducts TDS and deposits it with the tax department.
This article is general information, written in November 2026, and is not legal, tax or financial advice. Rules, rates and limits change; please confirm the current position with the authority concerned or a qualified professional before you act.
