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Indexation choice on a flat bought before July 2024

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For land or building bought before 23 July 2024, resident individuals and HUFs can pay the lower of 12.5% without indexation and 20% with indexation. Others pay 12.5% without indexation. The choice is worked out in Schedule CG.

Provisions

Sec 112 (now Sec 197); Sec 48 (now Sec 72); Sec 2(42A) (now Sec 2(101))

Analysis

Say the sale price is ₹90 lakh and cost was ₹30 lakh. Without indexation the gain is ₹60 lakh, tax at 12.5% is ₹7.5 lakh; with indexation (cost inflation index 200 for 2012-13 and 376 for 2025-26) the cost rises to about ₹56.4 lakh, giving a ₹33.6 lakh gain and tax at 20% of about ₹6.7 lakh, which is lower here. Under Sec 112 (now Sec 197), you pay the lower figure. Compute both before filing and keep the working.

Close

  1. Find purchase date, cost and improvement costs with dates.
  2. Compute gain with and without indexation.
  3. Compare 12.5% and 20% tax.
  4. Report the chosen computation in Schedule CG.

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