India Capital Gains TaxCapital gains tax on property
Land and buildings are short-term if held for 24 months or less and long-term if held longer (section 2 of the Income-tax Act, 2025, read on 13 November 2026). A long-term gain is taxed at 12.5% (section 197(1)). A short-term gain is added to total income and taxed at the slab rates.
Property bought before 23 July 2024
For a resident individual or HUF, section 197(3) says that the excess of the 12.5% tax over a second figure is ignored. The second figure is the tax at 20% on the gain worked with the indexed cost of acquisition and indexed cost of improvement (as defined in section 72). In effect, the tax cannot be more than the 20%-with-indexation tax. The calculator on this site does not index, because the cost inflation index was not read for this site, so for old property the real tax can be lower than the 12.5% shown.
What is not covered
Exemptions for reinvesting the gain, the basic exemption adjustment for non-residents, stamp-duty value rules and joint ownership.
Common questions
Is indexation still available on property?
Section 197(3) of the Income-tax Act, 2025 gives a resident individual or HUF who sells land or a building acquired before 23 July 2024 a comparison: the excess of the 12.5% tax over the tax at 20% on gains worked with the indexed cost of acquisition and improvement is ignored, so the tax is the lower of the two. The indexation figures themselves are not on this site.
Sources
- The Income-tax Act, 2025, as published in the Gazette of India Extraordinary: section 2 (short-term and long-term capital asset), sections 196, 197 and 198 (tax on capital gains). The enacted text was read on 13 November 2026.
- Slab tax on other income, the ₹4,00,000 first slab and the 4% cess for 2026-27: the Tax Slabs section of this family (its own sources apply).
Rules read on 13 November 2026 from the Income-tax Act, 2025. Surcharge, losses, reinvestment exemptions and indexation are not worked. This site is independent, not connected with the Income Tax Department, and gives arithmetic, not tax advice. Ask a chartered accountant about your own sale.