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Capital gain calculation on sold residential property

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disha paliwal

37 Points Posted on 27 June 2023

For sold residential property, while calculating capital gain apart from indexation, what additional could be included to reduce tax liability?

Does property tax paid and initial registration stamping cost beared also be offset from capital gain amount

Replies (3)

Quick Summary

When calculating capital gains tax on a sold residential property, you can reduce your tax liability beyond just indexation. Costs like stamp duty, registration fees, and brokerage, both at the time of purchase and sale, can be offset. Furthermore, any improvements made to the property, when indexed, are also deductible. Don't forget to explore exemptions under Section 54 to potentially save your capital gains.

Rajnish Agrahari

40 Points Posted on 27 June 2023

One can go for exemption u/s 54 to save your capital gain from sale of residential property

rama krishnan

5751 Points Posted on 28 June 2023

Expenses incidental to sales can be reduced from full value of sale consideration such as brokerage
in cost of acquisition, registration charges, stamp duty, brokerage can be included. if you have done improvement to your property, that can also be deducted after indexing

Aashok Kumar Sharma

Finance/Compliance Consultant

75646 Points Posted on 08 November 2026

Other deductions in capital gains on a house:
• Besides the (indexed) cost of acquisition: cost of improvement (additions, structural changes, indexed from the year incurred); transfer expenses (brokerage, legal fees, stamp duty paid by the seller, advertising); and stamp duty and registration paid at the time of purchase (part of cost).
• Not allowed: home loan interest already claimed under Sec 24(b), routine repairs, and municipal taxes.
• Exemptions: Sec 54 (new house), 54EC (bonds).