Property Long Term Capital Gain Calculator for FY 2024-25 in Excel

Although there are various online calculators available for Long term capital gain for Property (Real Estate), having one in Excel will be extremely helpful. You will be able to use anytime anywhere, without the need of internet.

This article is dedicated to providing a working Calculator for calculating Captain Gain as per latest 2024 tax updates.. Before i share the file, it is important that you know all aspects of the process. Let’s Get started.

You need to understand that Long Term Capital Gain is crucial because it affects how much tax you pay when you sell an asset.

In India, the government taxes the profits you earn from selling assets, but it taxes long-term gains differently from short-term gains (assets held for shorter periods).

What is Long Term Capital Gain

In simple words, Long Term Capital Gain (LTCG) is the profit you make when you sell a capital asset—like property, shares, mutual funds, gold, or bonds—that you’ve held for a longer period. The term “long term” is defined differently depending on the type of asset. As per our Indian laws, it means :

For Real Estate or Property

LTCG (Long Term Capital Gain) arises when you sell real estate (like land, a residential house, or a commercial property) after holding it for a long-term period. In India, a property is considered a long-term capital asset if it has been held for more than 24 months (2 years). If you sell the property after this period, any profit made is considered a Long Term Capital Gain (LTCG).

For Market Dependent Investments

Long-term capital gains (LTCG) for market-dependent investments, such as equity shares and equity-oriented mutual funds, arise when these assets are held for more than 12 months. Gains exceeding ₹1.25 lakh in a financial year are taxed at 12.5% without indexation (post-Budget 2024). For debt mutual funds, which are considered non-equity, LTCG is taxed after 36 months of holding, at either 12.5% without indexation or 20% with indexation, depending on the sale date and asset acquisition timing.

For Gold

Gold, in any form (jewelry, coins, bars, ETFs, etc.), is indeed considered a capital asset under Indian tax laws, and any profit made from selling it is subject to capital gains tax. If you hold gold for a long-term period before selling it, you will incur a Long Term Capital Gain (LTCG). In India, gold is considered a long-term capital asset if it is held for more than 36 months (3 years).

For sales of gold on or after 23rd July 2024, the LTCG on gold is taxed at a flat rate of 12.5% without indexation.For gold assets acquired before 23rd July 2024, you have the option to either:

• Pay 12.5% tax without indexation, or
• Pay 20% tax with indexation (adjusting the purchase price for inflation).

LCTG Holding Period for Real Estate and Others as Per 2024

What is Indexation?

Indexation is a method used to adjust the purchase price of an asset to reflect inflation. This is done using the Cost Inflation Index (CII) provided by the Income Tax Department. It reduces the effective capital gains, and therefore, your tax liability.

For example, if you bought a property for ₹10 lakhs 10 years ago and sold it today for ₹30 lakhs, instead of taxing the ₹20 lakhs gain, you adjust the purchase price for inflation, which might bring the effective gain down.

Indexation is a process that adjusts the original purchase price of an asset, like a property or gold, to account for inflation over the period you’ve owned it. In other words, it helps you account for the fact that money’s value changes over time due to inflation. This adjustment reduces the amount of taxable profit you have to declare when you sell the asset, which in turn reduces the tax you have to pay.

Is Indexation Important?

When you sell an asset, like a property or gold, the profit you make is considered a capital gain, and you have to pay tax on that gain. However, inflation means that the value of money decreases over time. The price of things goes up, and the same amount of money buys less than it did years ago.

So, if you bought a property 10 years ago, the cost of that property today is higher not just because of market appreciation but also because of inflation. The government recognizes this and allows you to use indexation to adjust your purchase price for inflation. This way, you don’t end up paying tax on the “inflated” part of your profit that is really just due to the decreased value of money over time.

For properties acquired before 23rd July 2024, taxpayers can still choose to apply indexation to benefit from a reduced taxable capital gain, though the attractiveness of indexation is diminished with the introduction of the 12.5% flat rate

Do Understand that :

As per the recent changes, indexation is less critical than it was before the Budget 2024 changes. The introduction of the 12.5% tax rate without indexation has simplified tax calculations and made it a more attractive option in many cases. However, for long-held assets with significant inflation adjustments, opting for 20% with indexation can still be beneficial, especially for assets acquired before 23rd July 2024. Ultimately, the importance of indexation now depends on the nature of the asset, the period of holding, and the taxpayer’s specific situation.

What is CII (Cost Inflation Index)

The Cost Inflation Index (CII) is a number that the Indian Income Tax Department releases every year to measure inflation in the economy. It reflects how much the prices of goods and services have increased over time due to inflation.

Why is CII Important?

The CII is crucial when calculating Long Term Capital Gains (LTCG) on the sale of assets like property, gold, or shares. It helps you adjust the original purchase price of an asset to account for inflation, ensuring you don’t pay tax on the entire gain, which may partly be due to inflation.

By adjusting the purchase price using the CII, you reduce the amount of taxable capital gain, thereby lowering the tax you need to pay.

How is LTCG on Property Taxed in India as per Recent Updates in 2024

1. For Assets like Real Estate, Debt Mutual Funds, Gold:

Pre-Budget 2024: Long-term capital gains (LTCG) from these assets were taxed at 20% with the benefit of indexation, allowing you to adjust the purchase price of the asset for inflation.

Post-Budget 2024: For sales of these assets made on or after 23rd July 2024, LTCG is taxed at 12.5%without the benefit of indexation. However, if you choose to sell an asset acquired before 23rd July 2024, you have the option to either:

Pay 20% tax with indexation, or Pay 12.5% tax without indexation. This gives taxpayers the flexibility to choose whichever option is more tax-efficient depending on their specific situation.

2. For Equity Shares and Equity-Oriented Mutual Funds:

Although the scope of this article is Real Estate (Property) only, i would like to still include updated related to Equity oriented investments.

Pre-Budget 2024: If your long-term capital gains exceed ₹1 lakh in a financial year, the amount over ₹1 lakh was taxed at 10% without any benefit of indexation (as per Section 112A).

Post-Budget 2024: Starting from 23rd July 2024, the threshold for exemption has been raised to ₹1.25 lakh. Any long-term capital gains over ₹1.25 lakh in a financial year will now be taxed at 12.5% without the benefit of indexation. This change applies to both equity shares and equity-oriented mutual funds.

I came across this very informative video by the Mint, where they discussed the recent changes in very productive manner,

Are There Any Exemptions on LTCG?

Yes, there are exemptions available under different sections of the Income Tax Act to reduce or eliminate tax on LTCG:

1. Section 54: If you sell a residential property and reinvest the capital gain in buying another residential property, you can claim an exemption.
2. Section 54EC: If you invest the capital gain from the sale of land or a building in specified bonds (like NHAI or REC) within six months, you can get an exemption.
3. Section 54F: If you sell any long-term capital asset (other than a house) and use the entire sale proceeds to buy a residential property, you can get an exemption.

Explanation of Long-Term Capital Gains (LTCG) with OR without Indexation

LTCG with Indexation:

When you sell a long-term asset like property, the government allows you to adjust its purchase price for inflation over the years. This adjustment is called “indexation.” Indexation uses a factor called the Cost Inflation Index (CII), which the government publishes every year. By using indexation, you effectively increase the original purchase price of your asset to account for inflation, which reduces your taxable capital gains.

For example, if you bought a property for ₹20 lakhs in 2012 and sold it for ₹50 lakhs in 2024, you can increase the purchase price using the CII for those years. This makes your profit appear smaller, and you pay less tax. However, using indexation, the tax rate is generally higher (20%) but is based on a lower gain amount because of the inflation adjustment.

LTCG without Indexation:

Without indexation, you calculate your long-term capital gains simply by subtracting the original purchase price of the asset from the selling price, without any adjustment for inflation. This method is straightforward and may result in a higher gain amount, as the purchase price is not adjusted for inflation. However, the tax rate is generally lower (12.5%), which might still be favorable depending on the gain amount and tax policies.

This option is typically available for certain assets, like property, where the taxpayer can choose whether to use indexation or not, depending on which method results in a lower tax amount.

In summary, indexation reduces your taxable gains by adjusting for inflation, but the tax rate is higher (20%). Without indexation, the gain might be higher, but the tax rate is lower (12.5%), so choosing the right method depends on the specific situation and potential tax liability.

How to Calculate Long Term Capital Gain for Property for AY 2025-26

Step-by-Step Calculation of Long-Term Capital Gain (LTCG)

Determine the Full Value of Consideration:

The full value of consideration is the total amount received from the transfer of a capital asset (e.g., property, shares, etc.). It includes all monetary payments or the fair market value in specific cases

Full Value of Consideration = Sale Price of the Asset

Determine the Net Value of Consideration:

Net Sale Consideration = Full Value of Consideration − Expenses related to the transfer

Calculate the Indexed Cost of Acquisition:

Calculate the Indexed Cost of Improvement:

Deduct Exemptions (if applicable):

Certain exemptions are available under sections like 54, 54B, 54D, 54EC, and 54F if the capital gains are reinvested in specified assets. Deduct any applicable exemptions from the long-term capital gains.

Find More Info HERE

Calculate the Long-Term Capital Gain (LTCG):

LTCG = Net Sale Consideration−(Indexed Cost of Acquisition+Indexed Cost of Improvement)−Exemptions

Tax Rates for Long-Term Capital Gains for FY 2024-25

Listed Equity Shares and Equity-Oriented Mutual Funds:

• LTCG exceeding ₹1.25 lakh in a financial year is taxed at 12.5% (effective from 23rd July 2024).

Other Assets (such as Real Estate, Unlisted Shares, etc.):

• For transfers made on or after 23rd July 2024: Taxed at 12.5% without the indexation benefit.
• For transfers made before 23rd July 2024: Taxed at 20% with the indexation benefit.
• For land and buildings acquired before 23rd July 2024, taxpayers can opt for a 12.5% rate without indexation or 20% with indexation.

Example Calculation for Long Term Capital Gains Calculation on Property FY 2024-25

Suppose you purchased a property for ₹20,00,000 in FY 2012-13 and sold it for ₹50,00,000 in FY 2024-25:

Based on the formulas above, we got the values :

Indexed Cost of Acquisition = 36,30,000 INR
LTCG                        = 50,00,000−36,30,000=13,70,000 INR
Tax Payable                 = 13,70,000×0.20=2,74,000 INR
LTCG (Without Indexation)   = 30,00,000 INR
Tax Payable                 = 30,00,000×0.125=3,75,000 INR

Excel Calculator for FY 2024-25 Property Long Term Capital Gain Tax

Now, let’s discuss the part you have been waiting for, the Excel calculator.

We have prepared a 100% accurate working Excel calculator for FY 2024-25 or Assessment Year 2025-26. This works flawlessly with the recent changes. Take a look at the interface :

Everything here is self explanatory. You just need to feed in the values and the results will update in Realtime. You may download the .xlsx file from HERE

I hope this article cleared all your doubts regarding the Long Term Capital Gain for Property or in General. I am sure the Excel calculator for Long Term Capital Gain Tax for FY 2024-25 or Assessment Year 2025-26 is going to help you. Feel free to share your comments below.

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