# Tax on Sale of Flat or House

> Selling a flat or house held for more than 24 months gives long-term capital gain, taxed at 12.5% without indexation for sales from 23 July 2024; resident individuals and HUFs who bought before that date can instead pay 20% with indexation if that is lower. Held 24 months or less, the gain is short-term and taxed at slab rates. Reinvesting in another house (Section 54) or specified bonds (Section 54EC) can reduce the tax to nil.

Practice: Property & Capital Gains Tax — https://www.industax.com/services/property-tax/

The gain is the sale price — or the stamp-duty value if higher by more than 10% (Section 50C) — minus the cost of acquisition, cost of improvement and transfer expenses such as brokerage. Property bought before 1 April 2001 can use its fair market value on that date as cost, capped at the stamp-duty value then.

For a resident with an older property, we compute the tax both ways — 12.5% without indexation and 20% with indexation — and use whichever is lower. Then we plan the exemption: a new house within the time limits, a Capital Gains Account Scheme deposit if the purchase isn't complete before the return due date, or 54EC bonds within six months.

## Key facts

| Item | Detail |
| --- | --- |
| Long-term threshold | Held more than 24 months |
| LTCG rate (from 23 Jul 2024) | 12.5% without indexation; residents may choose 20% with indexation for pre-23-Jul-2024 purchases |
| STCG | Slab rates |
| Section 50C | Stamp-duty value replaces price if higher by more than 10% |
| Exemptions | Section 54 (new house), 54EC (bonds, up to ₹50 lakh) |

## Who needs this

- Owners selling a flat, apartment or independent house
- Families selling an old house bought decades ago
- Sellers planning to buy another home

## What's included

- Gain computed both ways where allowed
- 50C and FMV-2001 analysis
- Exemption planning and CGAS
- ITR filing with the capital gains schedule

## Documents

- Purchase deed and sale deed
- Improvement bills
- Brokerage and transfer expense receipts
- Stamp-duty value / guidance value

## Process

1. **Compute** — Gain computed under each available option.
2. **Plan** — Exemptions and timelines mapped.
3. **File** — Reported correctly in the ITR.

## Also covers

- **Flat sale tax** — Apartments and flats in housing societies.
- **Capital gains calculation** — Step-by-step computation including cost, improvement and transfer costs.

## FAQs

### Is indexation still available on house sales?

Only for resident individuals and HUFs selling property acquired before 23 July 2024, who can choose 20% with indexation instead of 12.5% without, whichever is lower. NRIs don't get this option.

### What if I sell below the stamp-duty value?

If the stamp-duty value exceeds the sale price by more than 10%, the stamp-duty value is taken as the sale price under Section 50C.

### Can I avoid tax by buying another house?

Yes. Section 54 exempts the gain invested in a new residential house within one year before or two years after the sale (three years if constructing), with the new house's cost capped at ₹10 crore for the exemption.

## Official sources

- Income Tax Department — capital gains exemptions: https://www.incometaxindia.gov.in/
- Income Tax e-Filing portal: https://www.incometax.gov.in/

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This is general information, not advice for your specific facts.