The Classic Partners LLP
Capital Gain on Sale of Property & Other Assets
Selling a flat, plot, gold, or any capital asset? We compute the gain, apply the right rate and indexation choice, claim exemptions, and handle TDS and ITR reporting end to end.
Plan My SaleHow is Capital Gain on Sale Taxed?
When you sell a capital asset — a house, plot, commercial unit, gold, or unlisted investment — the profit is taxed as capital gain. Immovable property and most non-listed assets become long-term after 24 months of holding. Long-term gains are taxed at 12.5% without indexation; for land or buildings acquired before 23 July 2024, resident individuals and HUFs can instead opt for 20% with indexation, whichever produces lower tax.
Property sales also bring procedural traps: TDS of 1% under Section 194-IA on sales of Rs. 50 lakh or more, stamp-duty value comparisons under Section 50C, and AIS reporting of the transaction. Combined with reinvestment exemptions under Sections 54, 54F, and 54EC, the difference between a planned and unplanned sale can be lakhs in tax — see our tax advisory on property sale for pre-sale planning.
Key Rules When Selling Property
- Section 50C — if the sale price is below the stamp-duty value (beyond 10% tolerance), the stamp value is treated as the sale consideration.
- TDS under 194-IA — buyer deducts 1% on consideration of Rs. 50 lakh or more; 20% TDS under 195 applies when the seller is an NRI.
- Cost of improvement — renovation and construction costs (with proof) reduce the taxable gain.
- Inherited property — the previous owner's cost and holding period count; gains are computed from the original acquisition.
- Advance tax — gains attract advance tax in the quarter of sale; missing it triggers 234B/234C interest.
What We Handle
Gain Computation
Indexed vs non-indexed computation — we pick the lower-tax option.
Exemption Claims
Sections 54, 54F, 54EC planned and documented properly.
50C Defence
Valuation officer reference where stamp value is unfair.
TDS Compliance
Form 26QB filing, lower-TDS certificates for NRI sellers.
CG Account Scheme
Parking unutilised gains in CGAS before the return deadline.
ITR Reporting
Schedule CG filing in ITR-2 reconciled with AIS data.
Why Choose The Classic Partners
- Qualified Chartered Accountants handling property and asset sales across Mumbai and India.
- Pre-sale planning — structuring the sale before the agreement saves the most tax.
- NRI expertise — TDS, repatriation, and DTAA handled alongside the gain.
- Transparent fees and a single point of contact for your transaction.
Frequently Asked Questions
What is the tax rate on sale of property?
Long-term gains (held over 24 months) are taxed at 12.5% without indexation. For property acquired before 23 July 2024, residents can opt for 20% with indexation if that's lower. Short-term gains are taxed at slab rates.
What happens if I sell below the stamp duty value?
Under Section 50C, if the sale price is lower than the stamp-duty value by more than 10%, the stamp value is deemed to be your sale consideration. You can dispute an excessive stamp value by seeking a valuation officer's report.
Is TDS deducted when I sell my property?
Yes. The buyer must deduct 1% TDS under Section 194-IA if the consideration is Rs. 50 lakh or more, deposited via Form 26QB. For NRI sellers, TDS under Section 195 applies at higher rates unless a lower-deduction certificate is obtained.
How is inherited property taxed on sale?
Inheritance itself is not taxed. On sale, the gain is computed using the original owner's cost and holding period, so most inherited property qualifies as long-term with all applicable exemptions available.
How can I save tax on property sale gains?
By reinvesting in a residential house under Section 54 or 54F, investing up to Rs. 50 lakh in 54EC bonds within 6 months, or depositing in the Capital Gains Account Scheme until reinvestment. The right route depends on your numbers and timeline.
Selling property or other assets?
Plan the sale before you sign — and keep more of your gains.
Contact Us