Capital Gains Tax Calculator for Property in India
Calculate your tax liability on property sales accurately. Understand short-term vs long-term capital gains and applicable tax rates.
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Understanding Capital Gains Tax on Property in India
Capital gains tax is levied on profits arising from the sale of property in India. The tax treatment varies based on how long you’ve held the property before selling it. Understanding these rules can help you plan your property transactions more efficiently.
Types of Capital Gains
Short-Term Capital Gains (STCG)
If you sell a property within 24 months (2 years) of purchase, the profit is considered a short-term capital gain. STCG is added to your annual income and taxed according to your applicable income tax slab rates.
Long-Term Capital Gains (LTCG)
When you sell a property after holding it for more than 24 months, the profit qualifies as a long-term capital gain. LTCG on property is taxed at a flat rate of 20% with indexation benefits.
Key Features of Property Capital Gains Tax
- Indexation Benefit: Adjusts purchase price for inflation using Cost Inflation Index (CII) published by the Income Tax Department
- Tax Rates: LTCG taxed at 20.8% (including cess) after indexation, STCG taxed as per income slab
- Exemptions Available: Section 54, 54EC, and 54F provide avenues to save tax
- Calculation Method: LTCG = Sale Price – (Indexed Purchase Price + Indexed Improvement Cost)
Tax Saving Exemptions
You can save capital gains tax by reinvesting the gains:
- Section 54: Reinvest in residential property within specified time limits
- Section 54EC: Invest in specified bonds within 6 months
- Section 54F: Reinvest in residential property when selling other assets
Important Considerations
Always remember these key points when dealing with property capital gains:
- Maintain proper documentation of purchase, improvement, and sale
- Calculate holding period accurately – from date of purchase to date of sale
- Consider all costs incurred during acquisition and improvements
- Consult a tax professional for complex cases or large transactions
What is capital gains tax on property in India?
It is the tax levied on profit from selling a property or land.
How is capital gains tax calculated for property?
Based on the holding period and indexation, using either short-term or long-term capital gains formulas.
What is the holding period for short-term capital gains on property?
Less than 24 months from the date of acquisition.
What is the holding period for long-term capital gains on property?
More than 24 months from the date of acquisition.
How much is the short-term capital gains tax on property in India?
It is taxed as per your applicable income tax slab.
What is the long-term capital gains (LTCG) tax rate?
20% with indexation benefits.
What is indexation in capital gains calculation?
Indexation adjusts the purchase price for inflation using the Cost Inflation Index (CII).
Is there any exemption on LTCG for property?
Yes, under Sections 54, 54EC, and 54F of the Income Tax Act.
Can I reinvest to save LTCG tax?
Yes, reinvesting in another residential property or specific bonds can help.
Is capital gains tax applicable if I gift property?
No tax for the giver, but the recipient may face tax on future sale.
Can I avoid capital gains tax on inherited property?
The tax is applicable only when the property is sold, not when inherited.
What is the Cost Inflation Index (CII)?
It is a value published annually by the Income Tax Department for indexation.
How do I report capital gains in ITR?
Under the ‘Capital Gains’ section while filing your Income Tax Return.
Are there calculators available online for LTCG on property?
Yes, many online tools like ours help you compute it instantly.
What documents do I need to calculate capital gains?
Purchase deed, sale deed, cost of improvement, and other relevant expenses.
What if I sold a joint property – who pays the tax?
Each co-owner pays tax proportionate to their ownership.
Do NRIs have to pay capital gains tax on Indian property?
Yes, NRIs are liable and subject to TDS as well.
How is TDS deducted on property sale for NRIs?
Generally, 20% on LTCG and 30% on STCG is deducted at source.
Are agricultural lands exempt from capital gains tax?
Only if located in a rural area as defined by the IT Act.
Can I offset capital loss from property with gains?
Yes, capital losses can be adjusted against capital gains under certain rules.
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