Taxation on LTCG for property sold after 24JUL2024

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This query is : Resolved

subhash (Querist)
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22 June 2026 For FY2025-26
I sold my residential property for a consideration of 100,00,000 (1 Cr) on 01/07/2025.
The purchase cost of this property was Rs 20,00,000 in Year 2008-09.
Indexed cost of this property is approx. 60,00,000

Thus LTCG after indexation was approx 40,00,000 (100,00,000-60,00,000)

After the sale, I purchased another residential property on 01/09/2025 for a price of 41,00,000 (all inclusive) to take benefit under section 54

Thus my indexd LTCG after section 54 should be 0 (40,00,000 -41,00,000). and I am being charged zero LTCG tax (the lower of CG tax of the two options (12.5% without indexation and 20% with indexation))
My income from other sources was 25,00,000 during the year
However, while calculating my final tax liability, the portal adds the unindexed LT capital gain of Rs 40,00,000 to my other sources income of 25,00,000 and puts my taxable income as 65,00,000 which triggers the surcharge at 10%. is this surcharge correct? is this the intent of indexation relief given by govt on july/aug 2024?

Aashok Kumar Sharma online

Aashok Kumar Sharma

(Expert)
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22 June 2026 The system is incorrectly including your non-indexed capital gains in your total income for surcharge purposes. You are legally entitled to choose the tax regime (indexed or non-indexed) that results in a lower tax liability. If the portal forces an incorrect surcharge, use the offline ITR utility to input your accurate taxable income manually or seek assistance from a tax professional to ensure you are not overpaying.

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