Source: Times Property ( https://bit.ly/4bQIdoG )

Long-term capital gains (LTCG) tax on property is a crucial consideration for high-net-worth individuals (HNIs) when selling real estate. The tax is applicable on profits earned from selling a property held for more than two years, with rates and exemptions governed by specific regulations. Understanding these rules helps HNIs plan transactions efficiently and reduce tax liabilities.

Developers also play a key role in simplifying the process by offering structured payment plans, reinvestment options, and advisory services. By aligning strategies with tax regulations, both HNIs and developers can ensure smoother transactions while optimising financial outcomes in property investments.

Latest News On LTCG Tax

In the Union Budget 2025-26, the government introduced personal income tax cuts to encourage middle-class spending and attract private investment. Lower tax rates leave individuals with higher disposable income, increasing their ability to save and invest. As savings grow, more people are likely to invest in assets such as property, stocks, and other long-term financial instruments. This, in turn, creates opportunities for long-term capital gains (LTCG).

What Is LTCG Tax On Property?

When a property is sold after being held for over 24 months, the profit is considered a long-term capital gain (LTCG). In India, long-term capital gains (LTCG) tax on real estate applies to profits from selling property held for over two years. As per the Union Budget 2024-2025, the LTCG tax rate is set at 12.5 per cent, with the exemption limit increased to Rs 1.25 lakh.

For the sale of land or buildings made after 23rd July 2024, taxpayers will have two taxation options if the property was acquired on or before July 22, 2024. They can either pay tax at 20 per cent with indexation benefits or opt for a 12.5 per cent tax rate without indexation benefits.

Capital Gains Tax Strategies For Wealthy Investors

High Net Worth Individuals (HNIs) in India can employ several strategies to optimise their capital gains tax liabilities, particularly when dealing with property investments. Key approaches include utilising Sections 54 and 54EC of the Income Tax Act, leveraging tax benefits specific to property investments, and structuring ownership through trusts or joint holdings.

Conclusion

Long-term capital gains (LTCG) tax on property remains a critical factor for high-net-worth individuals (HNIs) and investors in India. Recent tax reforms, including revised rates and indexation options, highlight the need for careful tax planning. By leveraging exemptions under Sections 54 and 54EC, reinvesting in affordable housing, and exploring structured investment strategies, taxpayers can effectively manage their liabilities.