Selling Property? Save 20% Tax With These 3 Moves

When you sell a house or plot in India, the profit is taxed as capital gains. The tax rate and exemptions depend on how long you held the property. Knowing the rules can save you lakhs.

Here's what happened: Property held over 24 months is taxed as Long-Term Capital Gains (LTCG) at 12.5% without indexation, as per Budget 2024 rules.. Short-term capital gains — on property sold within 24 months of purchase — are added to your income and taxed at your slab rate, up to 30%.. Homeowners can claim full LTCG exemption under Section 54 by reinvesting the gains into a new residential property within 2 years of sale..

What you should do: Calculate your holding period before listing: cross the 24-month mark to qualify for the lower 12.5% LTCG rate instead of your income slab.. Reinvest gains into a new home within 2 years (or construct within 3 years) to claim Section 54 exemption and potentially pay zero tax.. Deposit unused gains in a Capital Gains Account Scheme (CGAS) at any public sector bank before your ITR filing deadline to protect your exemption..

You can also invest up to ₹50 lakh of LTCG in REC or NHAI bonds under Section 54EC within 6 months of sale — even if you don't want to buy another property.