Compare 12.5% flat vs 20% indexed regime after Budget 2024. Section 54 + 54EC exemptions automatically applied.
Recommended: 12.5% Flat
12.5% Flat Regime
₹12.50 L
20% Indexed Regime
₹14.33 L
Flat 12.5% wins — purchase was recent, indexation gives little benefit
Older properties bought before 2010 typically benefit from indexation (high CII multiple). Newer purchases bought 2018+ often pay less under flat 12.5%. Long-held inherited or ancestral properties usually see the biggest indexation savings. Combine Section 54 (new house, ₹10 Cr cap) with Section 54EC bonds (₹50 L cap) to fully exempt large gains.
Felix tracks your real estate net worth, models LTCG scenarios, and shows whether you should hold, sell, or 1031-style rollover via Section 54.
Download Richify — It's FreeEffective 23 July 2024: long-term capital gains on immovable property held over 24 months are taxed at 12.5% WITHOUT indexation. For properties acquired BEFORE 23 July 2024, the taxpayer can choose between 12.5% flat (no indexation) or 20% WITH indexation — whichever results in lower tax (grandfathering provision per Finance (No. 2) Act 2024). For properties bought ON OR AFTER 23 July 2024: only the 12.5% flat regime applies — no indexation benefit.
Indexation adjusts the purchase price for inflation using the Cost Inflation Index (CII) published annually by the Income Tax Department. Formula: Indexed Cost = Original Cost × (CII of sale year ÷ CII of purchase year). This reduces the taxable gain by accounting for inflation. Example: bought a flat for ₹50L in FY 2014-15 (CII 240), sold in FY 2024-25 (CII 363) for ₹1.2 Cr. Indexed cost = 50L × 363/240 = ₹75.6L. LTCG with indexation = 1.2 Cr − 75.6L = ₹44.4L. Tax @ 20% = ₹8.88L. vs flat 12.5% on ₹70L gain = ₹8.75L.
Section 54 (residential property): invest the entire LTCG in purchase of another residential property in India within 1 year before or 2 years after sale (or construction within 3 years). Exemption equals the lower of (a) LTCG amount, or (b) cost of new property. The new property must be held for 3+ years; if sold earlier, the prior exemption is reversed. Effective Budget 2023, Section 54 is capped at ₹10 crore per transfer. For higher gains, the excess is taxable. Open a Capital Gains Account Scheme (CGAS) deposit to park unused gain pending property purchase.
Section 54EC bonds (NHAI / REC / PFC / IRFC) let you defer LTCG tax on any long-term capital asset (not just property) by investing the gain — capped at ₹50 lakh per financial year combined across all 54EC bonds. Lockin: 5 years (post-2018 amendments). Interest: 5.25% taxable annually (so net of tax it's roughly 3.7% for someone in 30% bracket). Investment must be made within 6 months of asset transfer. Useful when (a) you don't plan to buy another house, (b) gain exceeds Section 54 cap, or (c) you want guaranteed exit timeline. Compare bond return vs paying tax + reinvesting — often the latter wins.
Yes, you can combine Section 54 (residential property reinvestment) + Section 54EC (capital gains bonds, ₹50L cap) for the same LTCG, but only up to the LTCG amount itself. Example: ₹2 Cr LTCG → invest ₹1.5 Cr in new house (Section 54) + ₹50L in 54EC bonds → entire ₹2 Cr exempt. You cannot claim the same gain under both sections, and total exemption cannot exceed actual gain. Plan ahead: 54EC has 6-month deadline, Section 54 has 2-year (purchase) / 3-year (construction) deadline.
Post-Budget 2024 (effective 23 July 2024): immovable property must be held for MORE THAN 24 months for gains to qualify as long-term. Earlier the threshold was 36 months. Held for 24 months or less: STCG, taxed at slab rates (up to 30% + cess + surcharge). The holding period starts from date of allotment (for under-construction) or date of registration (for ready). For inherited property: the holding period of the previous owner is added to yours, and the cost basis is the original purchase cost (or FMV as of 1 April 2001 if acquired before that date).