Capital gains tax on selling a house: the basics
Holding period, indexation changes and the exemptions that can reduce what you owe.
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Gains on a house held for more than 24 months are long-term; otherwise they are short-term and taxed at your slab rate.
The Union Budget 2024 changed the long-term rate to 12.5% without indexation for transfers on or after 23 July 2024, with a choice for certain resident individuals on property bought before that date. Rules can change: check the current provisions.
Exemptions such as those under Sections 54 and 54EC can reduce tax if you reinvest in a new house or specified bonds within the time limits.
What this means for you
Keep purchase documents, improvement receipts and sale papers. Speak to a chartered accountant before you sign a sale agreement, not after.
Sources
- Income Tax Departmentprimary
- Union Budgetprimary