CHURUWALA HOMES LLP

Capital Gains Tax plays a crucial role when you're buying or selling property, especially in India’s rapidly growing markets like Mumbai. Whether you're a first-time homebuyer, NRI investor, or seasoned seller, understanding how capital gains work can help you plan smartly, save tax, and avoid surprises.

Let’s break it down in a simple and updated format, based on the latest rules for FY 2024-25 / AY 2025-26.

🧾 What is Capital Gains Tax?

When you sell a capital asset (like real estate, shares, or gold) and earn a profit, that profit is called a Capital Gain. This gain is taxable under the Income Tax Act 1961.

🕒 Types of Capital Gains

Type	Holding Period	Common Assets	Tax Rate
Short-Term Capital Gains (STCG)	Property held for ≤ 24 months	Real estate, gold, unlisted shares	Taxed as per your income slab
Long-Term Capital Gains (LTCG)	Property held for > 24 months	Real estate, land, house	Flat 12.5% tax (updated July 2024, no indexation allowed)

💡Note: For equity shares and mutual funds, the holding period is 12 months. STCG is now taxed at 20%, and LTCG at 12.5%, with a ₹1.25 lakh annual exemption.

🏡 Capital Gains on Real Estate

✳️ Short-Term Gains (Held < 24 months)
Profits are added to your total income and taxed as per your income tax slab.

✅ Long-Term Gains (Held > 24 months)

Flat 12.5% LTCG tax (from July 23, 2024, onwards)
No benefit of indexation (adjusting for inflation)
Surcharge and cess may apply

🚫 Capital Gains Exemption (How to Save Tax Legally)

Section	Benefit	Condition
54	Full or partial exemption on LTCG	Buy another residential property within 2 years (or construct in 3 years)
54EC	Up to ₹50 lakh exempt	Invest in NHAI or REC bonds within 6 months of sale

🧠 Expert Tip: If you're planning to upgrade your home or buy a new flat, these exemptions can save you lakhs in taxes.

🌐 Capital Gains for NRIs

TDS of 20% is deducted on LTCG by the buyer
You can claim refund by filing ITR 2
You can also use Section 54 or 54EC to save tax just like resident Indians

📌 New Updates to Know (2024-25 & Beyond)

✅ LTCG exemption limit raised to ₹1.25 lakh per year
✅ Holding period for LTCG on property reduced to 24 months
✅ Flat tax rate (12.5%) on LTCG with no indexation, applicable from July 23, 2024
✅ One-time capital loss set-off allowed in AY 2026–27 (Income Tax Bill 2025)

📋 Summary Table

Asset Type	Holding Period	STCG Rate	LTCG Rate	Exemption Options
Property	≤ 24 months	Slab Rate	—	—
Property	> 24 months	—	12.5%	54, 54EC
Equity Shares	≤ 12 months	20%	—	—
Equity Shares	> 12 months	—	12.5%	₹1.25 lakh/year exemption

🏢 Need Help with Capital Gains? We're Here.

As Mumbai’s trusted channel partner, we not only help you buy or sell property, but also guide you on tax-saving strategies, documentation, and ITR filing support — so you stay compliant and stress-free.

👉 Connect with us for free consultation on capital gains & property investment planning.

Capital Gain