How LTCG on a house sale is computed
For a residential property held for more than 24 months, the gain is long-term. The taxable gain is:
Net sale consideration − cost of acquisition − cost of improvement − exemptions
where net sale consideration = sale price − transfer expenses (brokerage / commission, legal & documentation charges, and any stamp duty borne by the seller).
12.5% without indexation vs 20% with indexation
Effective 23 July 2024, long-term property gains are taxed at a flat 12.5% without indexation. As a transitional relief, if the house was acquired before 23 July 2024 by a resident individual or HUF, you may instead compute the gain the old way — 20% with indexation using the Cost Inflation Index — and pay whichever tax is lower. This calculator shows both and uses the cheaper one. Property bought on or after 23 July 2024 has only the 12.5% option.
Section 54 & 54EC exemptions
- Section 54 — reinvest the capital gain in another residential house (buy within 2 years / construct within 3 years, or 1 year before the sale). The gain is exempt to the extent reinvested.
- Section 54EC — invest in NHAI / REC / PFC / IRFC bonds within 6 months of sale, capped at ₹50 lakh. Exempt to the extent invested.
FAQ
Which date decides indexation eligibility?
The date of purchase (acquisition). If it is before 23 July 2024 you get the 20%-with-indexation option in addition to the 12.5% flat rate. Indexation uses the Cost Inflation Index of the financial year of purchase and the year of sale.
Is surcharge included?
No. A 4% health-and-education cess is added. Surcharge depends on your total income and is capped at 15% for capital gains — add it separately if your income crosses the surcharge thresholds.
What if I held the house 24 months or less?
It is a short-term capital gain, taxed at your income-tax slab rate (not the LTCG rates here). The calculator will flag this.
What about property bought before 2001?
Use the fair market value as on 1 April 2001 as the cost of acquisition, and set the purchase date to FY 2001-02. Indexation then runs from the 2001-02 base index of 100.