\n\t| Section 54G 54GA<\/td> | On the transfer of assets in cases of the shifting of an industrial undertaking from an urban area.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\nCalculation of the Long-Term Capital Gain Tax<\/b><\/h2>\nThe long-term capital gain tax can be calculated by using the following formula.\u00a0<\/span><\/p>\n![\"Long](\"https:\/\/homebazaar-blog.s3.ap-south-1.amazonaws.com\/knowledge\/wp-content\/uploads\/2022\/03\/11090714\/Long-Term-Capital-Gain-Tax.webp\") <\/p>\n
The cost inflation index of the particular year is important for the calculation of the long-term capital gain tax.<\/p>\n The cost inflation index is set by the Central Government. The list of the inflation index is as follows-<\/p>\n ![\"Cost](\"https:\/\/homebazaar-blog.s3.ap-south-1.amazonaws.com\/knowledge\/wp-content\/uploads\/2022\/03\/11090712\/Cost-Inflation-Index.webp\") <\/p>\n
Example For The Calculation of Long-Term Capital Gain Tax<\/b><\/h2>\nConsider that you purchased a residential property in the year 2010 at Rs 50,00,000 and sold it in the year 2020 for Rs 1,20,00,000. You paid the brokerage of Rs 20,000.\u00a0<\/span><\/p>\nIn this case-\u00a0<\/b><\/p>\n\n- The property has been held for more than 2 years, and hence it will be considered as <\/span>Long Term Capital Gain<\/b>.<\/span><\/li>\n
- Because this property was sold in 2025, the current LTCG rule applies. For property transferred on or after 23 July 2024, LTCG is generally taxed at 12.5% without indexation, though eligible resident individuals and HUFs may opt for 20% with indexation if it is more beneficial.<\/li>\n<\/ul>\n
Sales Consideration of the property =\u00a0 Rs 1,20,00,000<\/span><\/p>\nCost of acquisition (Purchase Price) = Rs 50,00,000<\/span><\/p>\nExpenditure incurred for the transfer of property (Brokerage) = Rs 20,000<\/span><\/p>\nCost Inflation Index of the year 2015\u201316 = 254.<\/p>\n The Cost Inflation Index for FY 2025\u201326 = 376.<\/p>\n To Calculate the Indexed Cost of Acquisition-<\/b><\/p>\n Cost of acquisition \u00d7 Cost Inflation Index of the year of transfer \/ Cost Inflation Index of the year of acquisition<\/p>\n [50,00,000 \u00d7 376] \/ [254] = Rs 74,01,574.80<\/p>\n Long Term Capital Gain<\/strong> = Sales Consideration \u2013 (Expenditure on transfer + Indexed Cost of Acquisition + Indexed Cost of Improvement)<\/p>\n= 1,20,00,000 \u2013 [20,000 + 74,01,574.80 + Not Applicable]<\/p>\n Long Term Capital Gain<\/strong> = Rs 45,78,425.20<\/p>\nNow the Long Term Capital Gain Tax<\/strong> = 20% of Rs 45,78,425.20<\/p>\nLong Term Capital Gain Tax<\/strong> = Rs 9,15,685.04<\/p>\n\u201cThe Long Term Capital Gain gets the benefit of indexation under the eligible 20% regime. For property transferred on or after 23 July 2024, indexation is not available under the new 12.5% regime, but resident individuals and HUFs may opt for 20% with indexation for land or building acquired before 23 July 2024 if that is more beneficial.\u201d<\/strong><\/em><\/p><\/blockquote>\nDifference Between Short-Term Capital Gain Tax and Long-Term Capital Gain Tax<\/strong><\/h2>\n\n\n\n\n\t| Short-Term Capital Gain Tax<\/th> | Long-Term Capital Gain Tax<\/th>\n<\/tr>\n<\/thead>\n | \n\n\t| Applicable to the Profit or Capital Gain from holding the property for less than 2 years.<\/td> | Applicable to the Profit or Capital Gain from holding the property for more than 2 years.<\/td>\n<\/tr>\n | \n\t| For immovable properties such as land, building, or house, the tax applied is applicable as per the income tax slabs.<\/td> | Under the older indexed method, LTCG is taxed at 20% plus surcharge and cess; under the post-23 July 2024 rule, the tax rate is 12.5% without indexation for applicable transfers.<\/td>\n<\/tr>\n | \n\t| Short-term capital gains (STCG) on property are added to your total income and taxed at your applicable slab rates; while Section 80C deductions can reduce your total taxable income, they cannot be specifically used to offset capital gains.<\/td> | The relevant exemptions include Sections 54, 54B, 54D, 54EC, 54EE, 54F, 54G, and 54GA.<\/td>\n<\/tr>\n | \n\tThe Tax Exemption can be up to 1.5 Lakh under 80C.
\nWhere the 80U is applicable for Normal Disability: Rs. 75,000\/-
\nSevere Disability: Rs. 1,25,000\/-<\/td> | Section 54 exemption is capped at \u20b910 crore, and a one-time option to invest in two residential houses is available only where the capital gain does not exceed \u20b92 crore.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\nCapital Gains Deposit Account Scheme<\/b><\/h2>\nTo get the benefit of the tax deductions on the Capital Gains, you need to reinvest the amount within the given time period. The Capital Gains Deposit System, introduced in 1988, allows you to park the Capital Gains till you find suitable reinvestments as per Section 54.<\/p>\n The Capital Gains Deposit System benefits you in the following ways –<\/span><\/p>\n\n- Safeguards the Capital Gains before investing in the appropriate options as per the tax exemption criteria<\/span><\/li>\n
- Ensures that you don\u2019t miss the applicable tax exemptions<\/span><\/li>\n
- Get sufficient time to acquire new assets from the Capital Gains<\/span><\/li>\n
- Get the interest as per the Savings Bank \/ Fixed Deposit rates<\/span><\/li>\n<\/ul>\n
Opening The Capital Gains Deposit Account<\/b><\/h2>\nYou can open the Capital Gains Deposit Account in any authorized bank. There are two different types of Capital Gains Deposit options – Type A and Type B. Type A Capital Gains Deposit Accounts are similar to a savings account. It has a simple interest that is paid at regular intervals. Type B is similar to fixed deposits and has a maximum 3-year term.<\/p>\n Any amount withdrawn from a CGAS account must be used for the specified investment within 60 days, and any unutilised amount should be redeposited. The first withdrawal is made using Form C, and subsequent withdrawals are made using Form D.<\/p>\n Conditions for Saving The Capital Gain Tax<\/b><\/h2>\n\n- To claim exemption under Section 54, you must purchase a new residential house within 1 year before or 2 years after the sale, or construct one within 3 years. The 6-month limit applies specifically to Section 54EC (investing in specified bonds like NHAI\/REC).<\/li>\n
- For Section 54 and Section 54F, the new house is generally subject to a 3-year lock-in, while Section 54EC bonds have a 5-year lock-in.<\/li>\n
- If the amount invested in the new asset is lower than the capital gain, exemption is allowed only to the extent of the amount invested.<\/li>\n
- If you reinvest only part of the capital gain, the tax exemptions are applicable only on the reinvested amount.<\/li>\n
- To get the exemptions under 54, the new residential property should be purchased 1 year before or 2 Years after the sale of the existing property on which Capital Gain was received.<\/li>\n
- Under Section 54, if the capital gain is more than the cost of the new property, only the invested portion is exempt, and the remaining balance is taxable. The gain does not have to be less than the property value for the exemption to apply.<\/li>\n<\/ul>\n
Basic Exemption Limits for Total Income<\/strong><\/p>\n\n\n\n\n\t| Age<\/th> | Exemptions Limit<\/th>\n<\/tr>\n<\/thead>\n | \n\n\t| Below 60 Years<\/td> | Rs. 2,50,000 <\/td>\n<\/tr>\n | \n\t| 60-80 Years<\/td> | Rs. 3,00,000<\/td>\n<\/tr>\n | \n\t| Above 80 Years<\/td> | Rs. 5,00,000<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n These figures refer to the Basic Exemption Limit for total annual income, not a specific limit for capital gains tax. Under the New Tax Regime (default for 2025), the basic exemption limit is a uniform \u20b93,00,000 for all individuals regardless of age, though residents can still use their unused basic exemption to offset LTCG.<\/p>\n Capital Gain Tax on the Inherited Properties In India<\/b><\/h2>\nIf the property is received by inheritance or gift, the Capital Gain Tax is not applicable to it. However, if you sell the property received by inheritance or gift, then the tax is applicable on the capital gain.\u00a0<\/span><\/p>\nHere are the conditions for the calculation of the Capital Gain Tax on Inherited Properties:<\/span><\/p>\n\n- The cost of acquisitions will be the cost to the previous owner of the property<\/span><\/li>\n
- For inherited property, the indexation benefit is generally calculated from the year the previous owner originally acquired the asset.<\/li>\n
- The formula for the calculation of the Capital Gain Tax remains the same.\u00a0<\/span><\/li>\n<\/ul>\n
FAQs<\/b><\/h2>\n\n- What is Short-Term Capital Gain Tax on Property?<\/strong>
\nThe profit or gain from holding the property for less than 2 years is called the short-term capital gain. The tax applicable to the short-term capital gain is called the Short-Term Capital Gain Tax.<\/li>\n- What is Long-Term Capital Gain Tax on Property?<\/strong>
\nThe profit or gain from holding the property for more than 2 years is called the long-term capital gain. The tax applicable to the long-term capital gain is called the Long-Term Capital Gain Tax.<\/li>\n- How to Calculate the Short-Term Capital Gain Tax?<\/strong>
\nThe Short-Term Capital Gain Tax can be calculated by using the following formula:
\nShort Term Capital Gain Tax = Sales Consideration of Asset \u2013 Expenditure incurred for the transfer of property- Cost of Acquisition.<\/li>\n- How to Calculate the Long-Term Capital Gain Tax?<\/strong>
\nThe Long-Term Capital Gain Tax can be calculated by using the following formula:
\nLong Term Capital Gain Tax = Sales Consideration of the Asset \u2013 [Expenditure incurred for the transfer of property + Indexed Cost of Acquisition + Indexed Cost of improvement]<\/li>\n- How to save the Short-Term Capital Gain Tax?<\/strong>
\nShort-term capital gains from property are treated as normal income and taxed as per your slab rate. While Section 80C and 80U deductions can reduce your total taxable income, they cannot be specifically claimed against capital gains to lower that specific tax component directly. The maximum amount for the exemption can be up to Rs 1.5 lakh.<\/li>\n- How to save the Long-Term Capital Gain Tax?<\/strong>
\nExemption under Section 54 is based on the actual amount reinvested in a new property, capped at \u20b910 crore, and is not determined by the taxpayer’s age category.<\/li>\n- What is the Capital Gains Deposit Account Scheme?<\/strong>
\nThe capital gains deposit account scheme allows you to park your Capital Gains till you find the right reinvestment options. This ensures that you don\u2019t miss the applicable tax exemptions.<\/li>\n- What is the Capital Gain Tax on the inherited properties in India?<\/strong>
\nThere is no capital gain tax applicable to inherited or gifted properties. However, the capital gain tax is applicable on the profit from the sale of Inherited or gifted properties.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"What Is Capital Gain Tax on Property In India? The profit that you get by selling the property is considered income. Therefore, you need to pay the tax on the profit or gain from selling the property. This Tax on the Capital Assets is termed Capital Gain Tax. Real estate properties come under the category […]<\/p>\n","protected":false},"author":7,"featured_media":18557,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jnews-multi-image_gallery":[],"jnews_single_post":{"source_name":"","source_url":"","via_name":"","via_url":"","override_template":"0","override":[{"template":"1","single_blog_custom":"","parallax":"1","fullscreen":"1","layout":"right-sidebar","sidebar":"default-sidebar","second_sidebar":"default-sidebar","sticky_sidebar":"1","share_position":"top","share_float_style":"share-monocrhome","show_share_counter":"1","show_view_counter":"1","show_featured":"1","show_post_meta":"1","show_post_author":"1","show_post_author_image":"1","show_post_date":"1","post_date_format":"default","post_date_format_custom":"Y\/m\/d","show_post_category":"1","show_post_reading_time":"0","post_reading_time_wpm":"300","show_zoom_button":"0","zoom_button_out_step":"2","zoom_button_in_step":"3","show_post_tag":"1","show_prev_next_post":"1","show_popup_post":"1","number_popup_post":"1","show_author_box":"0","show_post_related":"0","show_inline_post_related":"0"}],"override_image_size":"0","image_override":[{"single_post_thumbnail_size":"crop-500","single_post_gallery_size":"crop-500"}],"trending_post":"0","trending_post_position":"meta","trending_post_label":"Trending","sponsored_post":"0","sponsored_post_label":"Sponsored by","sponsored_post_name":"","sponsored_post_url":"","sponsored_post_logo_enable":"0","sponsored_post_logo":"","sponsored_post_desc":"","disable_ad":"0","subtitle":"The Capital Gain Tax applies to the profit or gains from the sale of the property. The applicable Capital Gain Tax depends on various factors and can considerably impact the overall profits that remain in your hands. So, read on to know how to calculate the long-term and short-term capital gains on the property and proven ways to save the Capital Gains Tax for maximum benefit.","format":"standard"},"jnews_primary_category":{"id":""},"footnotes":""},"categories":[30],"tags":[146,147,149,148],"class_list":["post-2166","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-taxation","tag-capital-gain-tax","tag-capital-gain-tax-on-property","tag-long-term-capital-gain","tag-short-term-capital-gain"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.homebazaar.com\/knowledge\/wp-json\/wp\/v2\/posts\/2166","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.homebazaar.com\/knowledge\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.homebazaar.com\/knowledge\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.homebazaar.com\/knowledge\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/www.homebazaar.com\/knowledge\/wp-json\/wp\/v2\/comments?post=2166"}],"version-history":[{"count":0,"href":"https:\/\/www.homebazaar.com\/knowledge\/wp-json\/wp\/v2\/posts\/2166\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.homebazaar.com\/knowledge\/wp-json\/wp\/v2\/media\/18557"}],"wp:attachment":[{"href":"https:\/\/www.homebazaar.com\/knowledge\/wp-json\/wp\/v2\/media?parent=2166"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.homebazaar.com\/knowledge\/wp-json\/wp\/v2\/categories?post=2166"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.homebazaar.com\/knowledge\/wp-json\/wp\/v2\/tags?post=2166"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}} | |
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![\"Short-Term](\"https:\/\/homebazaar-blog.s3.ap-south-1.amazonaws.com\/knowledge\/wp-content\/uploads\/2022\/03\/11090722\/Short-Term-Capital-Gain-Tax-on-Property.webp\")
<\/p>\n![\"Rate](\"https:\/\/homebazaar-blog.s3.ap-south-1.amazonaws.com\/knowledge\/wp-content\/uploads\/2022\/03\/11090718\/Rate-Of-Income-Tax.webp\")
<\/p>\n![\"New](\"https:\/\/homebazaar-blog.s3.ap-south-1.amazonaws.com\/knowledge\/wp-content\/uploads\/2022\/03\/11090716\/New-Tax-Regime-Slabs-Default-for-FY-2025%E2%80%9326.webp\")
<\/p>\n![\"Short](\"https:\/\/homebazaar-blog.s3.ap-south-1.amazonaws.com\/knowledge\/wp-content\/uploads\/2022\/03\/11090720\/Short-Term-Capital-Gain-Tax.webp\")
Where –<\/p>\n![\"Long-Term](\"https:\/\/homebazaar-blog.s3.ap-south-1.amazonaws.com\/knowledge\/wp-content\/uploads\/2022\/03\/11090715\/Long-Term-Capital-Gain-Tax-on-Property.webp\")
<\/p>\n