Advice

Yes, sale of residential house property in Delhi wll amount to long term capital gains and will be taxable. Since the Delhi house was purchased in 2002 and if you sell it in 2012, i.e. more than 3 years after acquisition, it will be long term capital gain and cost of the house will be eligible for indexation as well.

The difference between sale consideration (as per Stamp Authority) and Indexed cost of acquisition will be taxable @ 20%.

You can avoid this tax by purchasing another house property from the sale consideration within 2 years from the date of transfer or construct the same within 3 years from the date of transfer. The amount of gain invested to purchase the new property will be exempt from tax provided you comply with the condition of lock-in-period of that house for 3 years from purchase date. If new house is sold before 3 years from purchase date, the capital gains exempt earlier will now be taxable as a reduction from its cost. Further, the uninvested amount can be put in a Capital Gains Account Scheme to avoid taxation of the same. (as per section 54)

You can also invest the capital gain in REC or NHAI bonds within 6 months from the date of transfer, again with a lock-in-period of 3 years. Upto Rs 50 lacs can be invested in such bonds in a FY (Sec 54EC).