{"id":36587,"date":"2025-02-26T14:26:10","date_gmt":"2025-02-26T08:56:10","guid":{"rendered":"https:\/\/rajasthanexpress.in\/index.php\/2025\/02\/26\/understanding-long-term-capital-gains-tax-on-property-and-how-real-estate-developers-can-assist\/"},"modified":"2025-02-26T14:26:10","modified_gmt":"2025-02-26T08:56:10","slug":"understanding-long-term-capital-gains-tax-on-property-and-how-real-estate-developers-can-assist","status":"publish","type":"post","link":"https:\/\/rajasthanexpress.in\/index.php\/2025\/02\/26\/understanding-long-term-capital-gains-tax-on-property-and-how-real-estate-developers-can-assist\/","title":{"rendered":"Understanding Long-Term Capital Gains Tax on Property and How Real Estate Developers Can Assist"},"content":{"rendered":"
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New Delhi [India], February 26:<\/strong> The Indian tax system can often feel complex, with multiple laws and exemptions and a clear understanding of these can make a significant difference in one\u2019s earnings. This is especially true in the case of capital gain tax, where taxpayers are mandated to pay a tax on profits made from selling an asset \u2013 bonds\/ shares\/ commodities or property. Long Term Capital Gain Tax (LTCGT) on property refers to tax levied on profits earned from selling property \u2013 commercial, residential, or even plots, held for more than 24 months. Post the Union Budget 2024-25, there have been changes in deduction limits, tax rates and also rules of the exemption \u2013 all of which can have a massive impact on financial gains from assets, especially on property. Considering the accelerated growth of the real estate sector, understanding these nuances has become imperative for taxpayers and investors, especially for High Net Worth Individuals (HNIs), who wish to navigate this optimally and tax-efficiently.<\/p>\n

To understand this better, let\u2019s understand the calculations. To calculate LTCG Tax, one starts by determining the Sale Price, followed by the calculated indexed cost of acquisition, which involves adjusting the purchase price for inflation using the Cost Inflation Index (CII), and then subtracting this from the Indexed cost of sale**. The profits, calculated based on the difference between the Indexed Cost of Acquisition during the purchase and the sale, are then multiplied by the tax rate which is currently 12.5% for long-term capital gain.<\/p>\n

Now, while the above continues to remain the standard practice, there have been some modifications in the 2024 budget, in terms of how one can reduce the LTCG tax and make the most out of the profits. These modifications include,<\/p>\n