📌 Tax Rates Applicable

• For transfers before 23 July 2024:
  • Long-term capital gains (LTCG) on sale of immovable property are taxed at 20%.
  • Indexation benefit is available to adjust the cost of acquisition for inflation.
• For transfers on or after 23 July 2024:
  • LTCG is taxed at a flat 12.5%.
  • No indexation benefit is available.

STCG is taxed as Per Slab Rate

This change was introduced by Finance Act (No. 2) of 2024 to simplify capital gains taxation but also removes the inflation-adjustment benefit for future transactions.

✅ Tax Saving Options on LTCG from Property

1) Section 54 – Sale of Residential House & Purchase of Another

• Who can claim: Individual or HUF.
• Eligible Asset: Long-term residential house property.
• New Asset Required: Another residential house in India.
• Time Limits:
  • Purchase within 1 year before or 2 years after transfer, OR
  • Construct within 3 years after transfer.
• Monetary Limits:
  • Exemption limited to actual capital gain invested.
  • If capital gain is more than ₹10 crore, exemption restricted to ₹10 crore (limit introduced from AY 2024–25).
• Special Note: Exemption can be claimed for investment in 2 houses once in a lifetime if capital gain ≤ ₹2 crore.

• When you want to claim exemption under Section 54, 54F, you must utilise the capital gain within the prescribed period (2–3 years). But the due date for filing ITR (31st July / 31st October) often comes much earlier.
• 👉 To bridge this gap, the Income Tax Act allows you to deposit unutilised capital gain / sale consideration into a Capital Gain Account (CGAS) before the due date of ITR.

2) Section 54EC – Investment in Specified Bonds

• Who can claim: Any taxpayer (Individual, HUF, Company, etc.).
• Eligible Asset: Long-term capital asset being land or building or both.
• New Asset Required: Notified bonds (NHAI, REC, PFC, IRFC).
• Time Limit: Investment must be made within 6 months from date of transfer.
• Monetary Limits:
  • Maximum investment = ₹50 lakh (per financial year, per assessee).
  • Bonds have a 5-year lock-in.
• Exemption Amount: Lower of (a) LTCG, or (b) amount invested in bonds.

3) Section 54F – Sale of Any Long-Term Asset (Other than House) & Invest in House

• Who can claim: Individual or HUF.
• Eligible Asset: Any long-term capital asset other than a residential house (e.g., plot, commercial property, gold, shares).
• New Asset Required: Residential house in India.
• Time Limits: Same as Section 54 (purchase 1 year before/2 years after, construct within 3 years).
• Monetary Limits:
  • No fixed upper cap like Section 54 (₹10 crore).
  • But exemption proportionate to Net Sale Consideration invested:Exemption=LTCG×(AmountInvested÷NetSaleConsideration)Exemption=LTCG×(AmountInvested÷NetSaleConsideration)
• Condition:
  • On the date of transfer, taxpayer should not own more than one residential house (other than the new one).
  • If full consideration is not invested, exemption is partial.

✨ Quick Snapshot of Limits

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