Sold Property in FY26? 12.5% LTCG May Save You More

If you sold a property this year, you can pick between 12.5% flat LTCG tax or 20% with indexation. Depending on how much your property's value grew, the flat rate could actually cost you less. Always calculate both before filing.

Here's what happened: Budget 2024 gave property sellers two LTCG tax options: flat 12.5% without indexation, or 20% with indexation benefit for properties bought before July 2024.. Indexation adjusts your purchase price for inflation, reducing your taxable gain — but only helps significantly when property appreciation has been modest or slow.. For properties that have appreciated sharply (3x or more), the flat 12.5% rate on a larger gain often results in lower final tax than 20% on the indexed gain..

What you should do: Calculate your taxable gain under BOTH methods before filing your ITR — use the CII (Cost Inflation Index) from the Income Tax Department website for the purchase year.. Ask your CA or use an online LTCG calculator to compare actual tax payable under 12.5% flat vs 20% with indexation for your specific purchase price and sale price.. Do NOT assume indexation always saves money — if your property tripled or more in value, the flat 12.5% route will likely cut your tax bill significantly..

Properties bought before 2001 use FMV as of April 1, 2001 as the base cost — get a registered valuer's certificate to maximise your indexed cost and lower your taxable gain under the 20% route.