By Arosh John | Real Estate Consultant & Founder – John Real Estate | Editor in Chief – Thane Real Estate News
Selling property in India now comes with updated tax rules. The government introduced changes to Long-Term Capital Gains (LTCG) on 23 July 2024, and both residents and NRIs must plan accordingly.
🔹 For Residents (Individuals & HUFs)
Residents now face two options:
- Pay 12.5% without indexation.
- Or, if the property was acquired before 23 July 2024, continue with 20% tax using indexation.
This flexibility allows homeowners to compare both methods and choose whichever reduces their tax liability. In many cases, indexation provides relief for older properties.
🔹 For NRIs
NRIs do not have the same choice. They pay a flat 12.5% without indexation, no matter when the property was purchased.
Buyers also deduct TDS under Section 195. Although the law requires TDS on the gains, buyers often deduct on the entire sale value. Therefore, NRIs should apply for a lower or nil TDS certificate (Form 13 under Sec. 197) before closing the deal. This step prevents heavy cash flow blockage and avoids waiting for refunds.
🔹 Surcharge & Cess
Tax liability does not stop with LTCG. Once total income exceeds ₹50 lakh, surcharge applies. However, surcharge on LTCG is capped at 15%, and all taxpayers pay an additional 4% health and education cess.
✅ Key takeaway:
- Residents can benefit by comparing 12.5% without indexation against 20% with indexation for pre–23 Jul 2024 purchases.
- NRIs must plan for 12.5% without indexation and secure a TDS certificate to avoid excess deduction.
About the Author
Arosh John is a MahaRERA-registered Real Estate Consultant, Founder of John Real Estate, and Editor in Chief of Thane Real Estate News. He specializes in luxury villas, resale transactions, and NRI investments in the Thane market.
⚖️ Disclaimer: This article is for informational purposes only and should not be treated as financial or tax advice. Tax rules may vary depending on individual circumstances. Please consult a qualified Chartered Accountant or tax advisor before making property-related decisions.
