My Friend Purchased a land on 23.07.2014 for 8,25,000/-, he is selling this land now on 15.04.2026 for 12,50,000/-, How much tax will he have to pay? does he get any indexation benefit ? He files Income tax under New Regime.
My Friend Purchased a land on 23.07.2014 for 8,25,000/-, he is selling this land now on 15.04.2026 for 12,50,000/-, How much tax will he have to pay? does he get any indexation benefit ? He files Income tax under New Regime.
Your friend should choose the Old Rule because it results in a Nil Tax liability.
Tax Payable: ₹0
Benefit: He can actually carry forward the calculated capital loss (approx. ₹73,437) to offset against any future Long-Term Capital Gains for up to 8 years, provided he files his ITR on time.
Ensure your friend keeps the sale deed and purchase deed handy, and consider any registration fees or brokerage paid during purchase/sale, as these can be added to the cost to further increase the loss/reduce gains.
Indexed cost of acquisition.
Holding period > 24 months on land, so under Sec 2(29A)/2(42A) it's a long-term capital asset. Post Finance (No. 2) Act 2024, for land/building transferred on or after 23.07.2024 the taxpayer gets to choose (proviso to Sec 112(1)): (a) 12.5% without indexation, or (b) 20% with indexation under Sec 48 second proviso (only available to resident individuals/HUF for land & building acquired before 23.07.2024). Option A: (12,50,000 − 8,25,000) × 12.5% = ₹53,125. Option B: Indexed cost = 8,25,000 × (363/240) ≈ ₹12,48,125, LTCG ≈ ₹1,875, tax @ 20% = ₹375. Option B clearly wins here. New regime (Sec 115BAC) doesn't affect capital gains rates — those are special rates, they sit outside the regime. File as LTCG under "Capital Gains" schedule regardless.
Also fwiw, I've been using catargettestprep.com for exactly this. Free AI tutor for Paper 3, grades written answers and cites section numbers. Limited to 100 early students, ships new content daily. Worth trying if you're doing self-study for May attempt.
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