{"id":15329,"date":"2025-09-25T07:29:03","date_gmt":"2025-09-25T07:29:03","guid":{"rendered":"https:\/\/tezgyan.com\/index.php\/2025\/09\/25\/property-sales-in-fy2025-26-how-much-ltcg-tax-youll-pay-at-12-5-or-20-with-indexation-tax-news\/"},"modified":"2025-09-25T07:29:03","modified_gmt":"2025-09-25T07:29:03","slug":"property-sales-in-fy2025-26-how-much-ltcg-tax-youll-pay-at-12-5-or-20-with-indexation-tax-news","status":"publish","type":"post","link":"https:\/\/tezgyan.com\/index.php\/2025\/09\/25\/property-sales-in-fy2025-26-how-much-ltcg-tax-youll-pay-at-12-5-or-20-with-indexation-tax-news\/","title":{"rendered":"Property Sales In FY2025-26: How Much LTCG Tax You\u2019ll Pay At 12.5% Or 20% With Indexation | Tax News"},"content":{"rendered":"


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Nirmala Sitharaman in Budget 2024-25 cuts LTCG tax on property sales to 12.5 percent but removes indexation, impacting sellers differently based on purchase year and cost.<\/h2>\n
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Explained: Property LTCG Tax in FY2025-26 \u2014 12.5% Without Indexation or 20% With It.<\/p>\n<\/figure>\n

Property LTCG Tax:<\/strong> In one of the major decisions, Finance Minister Nirmala Sitharaman in the Budget 2024-25 proposed to reduce the long-term capital gains (LTCG) tax on property sales from 20 per cent to 12.5 per cent. However, the indexation benefit for inflation is also removed.<\/p>\n

According to the Memorandum to the Union Budget, \u201cSimultaneously with the rationalisation of rate to 12.5 per cent, indexation available under the second proviso to section 48 is proposed to be removed for the calculation of any long-term capital gains which is presently available for property, gold, and other unlisted assets. This will ease the computation of capital gains for the taxpayer and the tax administration.”<\/p>\n

Although the benefit of indexation has been withdrawn, it continues to be available in a limited way for land and building transactions. If a resident individual or resident HUF sells land or a building acquired earlier, on or after 23rd July 2024, they can choose to pay tax on the long-term capital gains at the lower of the two: 12.5% on the unindexed gains or 20% on the indexed gains, for FY2024-26.<\/p>\n

Nevertheless, this benefit is available only for taxation computation purpose not for other purposes like exemptions of investment in property.<\/p>\n

Earlier, the holding period rules for long-term capital assets varied: more than one year for listed shares and equity mutual funds, two years for unlisted shares and land\/building, and three years for other assets. After the July 2024 Budget amendment, the three-year rule has been reduced to two years, so now there are only two conditions\u2014assets held for more than one year, and assets held for more than two years.<\/p>\n

Understand LTCG Tax With Three Scenarios For Property Sold In FY2025-26<\/h3>\n
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Case 1: Property bought long ago (2005) at low price<\/h3>\n