{"id":8640,"date":"2025-02-24T08:05:31","date_gmt":"2025-02-24T08:05:31","guid":{"rendered":"https:\/\/www.caindelhiindia.com\/blog\/?p=8640"},"modified":"2025-07-08T19:56:57","modified_gmt":"2025-07-08T19:56:57","slug":"taxation-on-sale-of-property","status":"publish","type":"post","link":"https:\/\/www.caindelhiindia.com\/blog\/taxation-on-sale-of-property\/","title":{"rendered":"Taxation on Sale of Property under Income Tax Bill, 2025"},"content":{"rendered":"<h2><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-5415\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/03\/Capital-Gain..jpg\" alt=\"Redevelopment is taxable\" width=\"923\" height=\"406\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/03\/Capital-Gain..jpg 600w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2023\/03\/Capital-Gain.-300x132.jpg 300w\" sizes=\"(max-width: 923px) 100vw, 923px\" \/><\/h2>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69dffec104398\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69dffec104398\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caindelhiindia.com\/blog\/taxation-on-sale-of-property\/#Taxation_on_Sale_of_Property_under_Income_Tax_Bill_2025\" title=\"Taxation on Sale of Property under Income Tax Bill, 2025\">Taxation on Sale of Property under Income Tax Bill, 2025<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caindelhiindia.com\/blog\/taxation-on-sale-of-property\/#Capital_Gain_Taxation_on_Sale_of_Property_in_india\" title=\"Capital Gain Taxation on Sale of Property in india\">Capital Gain Taxation on Sale of Property in india<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caindelhiindia.com\/blog\/taxation-on-sale-of-property\/#Short-term_vs_Long-term_Capital_Gains\" title=\"Short-term vs. Long-term Capital Gains\">Short-term vs. Long-term Capital Gains<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.caindelhiindia.com\/blog\/taxation-on-sale-of-property\/#Short-Term_vs_Long-Term_Capital_Gains_on_Property\" title=\"Short-Term vs. Long-Term Capital Gains on Property\">Short-Term vs. Long-Term Capital Gains on Property<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.caindelhiindia.com\/blog\/taxation-on-sale-of-property\/#New_Tax_Regime_for_LTCG_Post-July_23_2024\" title=\"New Tax Regime for LTCG (Post-July 23, 2024)\">New Tax Regime for LTCG (Post-July 23, 2024)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.caindelhiindia.com\/blog\/taxation-on-sale-of-property\/#Computation_of_Capital_Gains\" title=\"Computation of Capital Gains\">Computation of Capital Gains<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.caindelhiindia.com\/blog\/taxation-on-sale-of-property\/#Tax_Exemptions_on_Capital_Gains_from_Property_Sales\" title=\"Tax Exemptions on Capital Gains from Property Sales\">Tax Exemptions on Capital Gains from Property Sales<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.caindelhiindia.com\/blog\/taxation-on-sale-of-property\/#Exemptions_on_Short-Term_Capital_Gains\" title=\"Exemptions on Short-Term Capital Gains\">Exemptions on Short-Term Capital Gains<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.caindelhiindia.com\/blog\/taxation-on-sale-of-property\/#Exemptions_on_Long-Term_Capital_Gains\" title=\"Exemptions on Long-Term Capital Gains.\">Exemptions on Long-Term Capital Gains.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.caindelhiindia.com\/blog\/taxation-on-sale-of-property\/#Tax_Exemption_Under_Section_54\" title=\"Tax Exemption Under Section 54\">Tax Exemption Under Section 54<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.caindelhiindia.com\/blog\/taxation-on-sale-of-property\/#Tax_Exemption_Under_Section_54F\" title=\"Tax Exemption Under Section 54F\">Tax Exemption Under Section 54F<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.caindelhiindia.com\/blog\/taxation-on-sale-of-property\/#Summary_of_Capital_Gains_Tax_Exemptions\" title=\"Summary of Capital Gains Tax Exemptions\">Summary of Capital Gains Tax Exemptions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.caindelhiindia.com\/blog\/taxation-on-sale-of-property\/#Capital_Gains_Account_Scheme\" title=\"Capital Gains Account Scheme: \">Capital Gains Account Scheme: <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.caindelhiindia.com\/blog\/taxation-on-sale-of-property\/#Carry_Forward_of_Losses_from_House_Property\" title=\"Carry Forward of Losses from House Property: \">Carry Forward of Losses from House Property: <\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.caindelhiindia.com\/blog\/taxation-on-sale-of-property\/#Impact_of_Budget_2025_on_Section_87A_Applicability_on_Capital_Gains\" title=\"Impact of Budget 2025 on Section 87A Applicability on Capital Gains\">Impact of Budget 2025 on Section 87A Applicability on Capital Gains<\/a><ul class='ez-toc-list-level-4'><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.caindelhiindia.com\/blog\/taxation-on-sale-of-property\/#Under_the_Old_Tax_Regime\" title=\" Under the Old Tax Regime\"> Under the Old Tax Regime<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.caindelhiindia.com\/blog\/taxation-on-sale-of-property\/#Under_the_New_Tax_Regime\" title=\" Under the New Tax Regime\"> Under the New Tax Regime<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.caindelhiindia.com\/blog\/taxation-on-sale-of-property\/#Comparison_of_deduction_of_interest_on_house_property_between_the_Old_Regime_and_the_New_Tax_Regime_under_Indian_Income_Tax_Law\" title=\"Comparison of deduction of interest on house property between the Old Regime and the New Tax Regime under Indian Income Tax Law.\">Comparison of deduction of interest on house property between the Old Regime and the New Tax Regime under Indian Income Tax Law.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/www.caindelhiindia.com\/blog\/taxation-on-sale-of-property\/#Deduction_of_Interest_on_House_Property\" title=\"Deduction of Interest on House Property\">Deduction of Interest on House Property<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/www.caindelhiindia.com\/blog\/taxation-on-sale-of-property\/#Key_Implications_of_deduction_of_interest_on_house_property_between_the_Old_Regime_and_the_New_Tax_Regime\" title=\"Key Implications of deduction of interest on house property between the Old Regime and the New Tax Regime\">Key Implications of deduction of interest on house property between the Old Regime and the New Tax Regime<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/www.caindelhiindia.com\/blog\/taxation-on-sale-of-property\/#Comparison_of_deductionsexemptions_available_under_the_New_Tax_Regime_vs_the_Old_Tax_Regime\" title=\"Comparison of deductions\/exemptions available under the New Tax Regime vs. the Old Tax Regime.\u00a0\">Comparison of deductions\/exemptions available under the New Tax Regime vs. the Old Tax Regime.\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/www.caindelhiindia.com\/blog\/taxation-on-sale-of-property\/#New_Regime_vs_Old_Regime_%E2%80%93_Tax_Benefits_Comparison\" title=\"New Regime vs. Old Regime \u2013 Tax Benefits Comparison\">New Regime vs. Old Regime \u2013 Tax Benefits Comparison<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/www.caindelhiindia.com\/blog\/taxation-on-sale-of-property\/#CII_for_FY_25-26_notified\" title=\"CII for FY 25-26 notified\">CII for FY 25-26 notified<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Taxation_on_Sale_of_Property_under_Income_Tax_Bill_2025\"><\/span><span style=\"color: #000080;\"><strong>Taxation on Sale of Property under <\/strong><strong>Income Tax Bill, 2025<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The New Income Tax Bill, 2025, introduced in the Lok Sabha on February 13, 2025, aims to simplify and modernize India&#8217;s tax laws. While the bill largely aligns with the existing provisions of the Income-tax Act, 1961, it introduces certain changes concerning the taxation of property sales and the treatment of losses from house property.<\/p>\n<p>Budget 2025 Updates: the income tax rebate u\/s 87A has been increased to INR 60,000, making an income up to INR 12,00,000\/- tax-free under the new tax regime. However, this increased rebate is not applicable to special grade incomes such as &#8216;Capital Gains&#8217;.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Capital_Gain_Taxation_on_Sale_of_Property_in_india\"><\/span><span style=\"color: #000080;\"><strong>Capital Gain Taxation on Sale of Property in india<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Overview\u00a0of capital gains taxation on the sale of immovable property, incorporating the recent changes effective from July 23, 2024.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Short-term_vs_Long-term_Capital_Gains\"><\/span><span style=\"color: #000080;\"><strong>Short-term vs. Long-term Capital Gains<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>STCG: If the property is sold within 24 months, taxed at applicable slab rates.<\/li>\n<li>LTCG: If held for more than 24 months, taxed at 12.5% (without indexation) or 20% (with indexation, if acquired before July 23, 2024).<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Short-Term_vs_Long-Term_Capital_Gains_on_Property\"><\/span><span style=\"color: #000080;\"><strong>Short-Term vs. Long-Term Capital Gains on Property<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<table>\n<tbody>\n<tr>\n<td><strong>P<\/strong>articulars<\/td>\n<td>Short Term Capital Gains on Property<\/td>\n<td>Long-Term Capital Gains on Property<\/td>\n<\/tr>\n<tr>\n<td>Definition<\/td>\n<td>Sold within 24 months<\/td>\n<td>Sold after 24 months<\/td>\n<\/tr>\n<tr>\n<td>Tax Rate<\/td>\n<td>Slab rate<\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>(i) 20% with indexation (If sold before 23rd July 2024)<\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>(ii) 12.5% without indexation (If sold on or after 23rd July 2024)<\/td>\n<td><\/td>\n<td><\/td>\n<\/tr>\n<tr>\n<td>Indexation Benefit<\/td>\n<td>Not available<\/td>\n<td>Available (optional)<\/td>\n<\/tr>\n<tr>\n<td>Tax Applicability<\/td>\n<td>Added to total income and taxed as per slab rates<\/td>\n<td>Taxed at fixed rates<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3><span class=\"ez-toc-section\" id=\"New_Tax_Regime_for_LTCG_Post-July_23_2024\"><\/span><span style=\"color: #000080;\"><strong>New Tax Regime for LTCG (Post-July 23, 2024)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>For properties bought on or after July 23, 2024: Only 12.5% tax without indexation is applicable.<\/li>\n<li>For properties bought before July 23, 2024: Taxpayer can choose between 12.5% (without indexation) or 20% (with indexation).<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Computation_of_Capital_Gains\"><\/span><span style=\"color: #000080;\"><strong>Computation of Capital Gains<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Long-Term Capital Gains before July 23, 2024: Indexed cost of acquisition &amp; improvement can be deducted.<\/li>\n<li>Long-Term Capital Gains after July 23, 2024: Indexation benefit is removed if opting for the 12.5% tax rate.<\/li>\n<li>Under the Income Tax Bill 2025, for property acquired before July 23, 2024, Long-Term Capital Gains tax will be calculated as the lower of:<\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>5% (without indexation)<\/li>\n<li>20% (with indexation using CII adjustment)<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>For property acquired on or after July 23, 2024, Long-Term Capital Gains will be taxed at 12.5% without indexation. This change provides more flexibility to property sellers, allowing them to choose between indexed and non-indexed tax rates for properties bought before the cutoff date.<\/p>\n<p>For properties acquired on or after July 23, 2024, the bill proposes a uniform Long-Term Capital Gains tax rate of 12.5% without the benefit of indexation. We have to be aware that the Income Tax Bill, 2025, is currently a proposal and has not yet become law. Its provisions are subject to change during the legislative process. These provisions are designed to provide relief to taxpayers with property-related losses, allowing them to offset such losses against other income and carry forward unadjusted losses for future set-off.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Tax_Exemptions_on_Capital_Gains_from_Property_Sales\"><\/span><span style=\"color: #000080;\"><strong>Tax Exemptions on Capital Gains from Property Sales<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3><span class=\"ez-toc-section\" id=\"Exemptions_on_Short-Term_Capital_Gains\"><\/span><span style=\"color: #000080;\"><strong>Exemptions on Short-Term Capital Gains<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>Old Regime:\n<ul>\n<li>Income below Rs. 2,50,000 (for individuals below 60 years) is exempt.<\/li>\n<li>Income below Rs. 3,00,000 (for individuals aged 60-80 years) is exempt.<\/li>\n<\/ul>\n<\/li>\n<li>New Regime:\n<ul>\n<li>Exemption applies if total income is below Rs. 4,00,000.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Exemptions_on_Long-Term_Capital_Gains\"><\/span><span style=\"color: #000080;\"><strong>Exemptions on Long-Term Capital Gains.<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p style=\"padding-left: 40px;\">Long-Term Capital Gains tax exemptions are available u\/s 54, 54F, 54EC, and 54GB.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Tax_Exemption_Under_Section_54\"><\/span><span style=\"color: #000080;\"><strong>Tax Exemption Under Section 54<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>To qualify for this exemption: Asset must be classified as a long-term capital asset. The asset sold must be a residential house. A new residential house must be purchased within 1 year before or 2 years after the sale (or constructed within 3 years). The new property must be located in India. The exemption is capped at 10 crore (effective April 1, 2023). The exemption applies to two residential properties (limited to Rs. 2 crore and only once in a lifetime).<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"Tax_Exemption_Under_Section_54F\"><\/span><span style=\"color: #000080;\"><strong>Tax Exemption Under Section 54F<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>For exemption under Section 54F: The taxpayer must reinvest the entire sale proceeds in another residential property. Purchase or construction of a new house must be within the prescribed period. The taxpayer must not own more than one residential house at the time of sale. Maximum deduction is 10 crore (effective April 1, 2024).<\/li>\n<li>Tax Exemption Under Section 54EC: Long-term capital gains can be reinvested in specified bonds (NHAI\/RECL\/PFC\/IRFC) within 6 months. If not invested, gains will be taxed as short-term capital gains.<\/li>\n<li>Tax Exemption Under Section 54B: Applies to agricultural land outside rural areas. If reinvestment is delayed, funds must be deposited in a Capital Gains Account Scheme within Two years.<\/li>\n<\/ul>\n<h3 data-pm-slice=\"1 3 []\"><span class=\"ez-toc-section\" id=\"Summary_of_Capital_Gains_Tax_Exemptions\"><\/span><span style=\"color: #000080;\"><strong>Summary of Capital Gains Tax Exemptions<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<table>\n<tbody>\n<tr>\n<td><span style=\"color: #000080;\"><strong>Section<\/strong><\/span><\/td>\n<td><span style=\"color: #000080;\"><strong>Eligible Taxpayers<\/strong><\/span><\/td>\n<td><span style=\"color: #000080;\"><strong>Sold Asset<\/strong><\/span><\/td>\n<td><span style=\"color: #000080;\"><strong>Investment Made In<\/strong><\/span><\/td>\n<td><span style=\"color: #000080;\"><strong>Time of Purchase<\/strong><\/span><\/td>\n<\/tr>\n<tr>\n<td><strong>54<\/strong><\/td>\n<td>Individual\/HUF<\/td>\n<td>Residential House<\/td>\n<td>New Residential House (India)<\/td>\n<td>Within 1 year before\/2 years after (3 years for construction)<\/td>\n<\/tr>\n<tr>\n<td><strong>54EC<\/strong><\/td>\n<td>Any Taxpayer<\/td>\n<td>Land\/Building (LTCG)<\/td>\n<td>NHAI\/RECL\/PFC\/IRFC Bonds<\/td>\n<td>Within 6 months<\/td>\n<\/tr>\n<tr>\n<td><strong>54F<\/strong><\/td>\n<td>Individual\/HUF<\/td>\n<td>Any LTCG Asset (except residential property)<\/td>\n<td>New Residential House<\/td>\n<td>Within 1 year before\/2 years after (3 years for construction)<\/td>\n<\/tr>\n<tr>\n<td><strong>54GB<\/strong><\/td>\n<td>Individual\/HUF<\/td>\n<td>Residential Property<\/td>\n<td>Equity Shares (50%+ ownership in a company)<\/td>\n<td>Before ITR due date<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<h3><span class=\"ez-toc-section\" id=\"Capital_Gains_Account_Scheme\"><\/span><span style=\"color: #000080;\">Capital Gains Account Scheme: <\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>The Capital Gains Account Scheme of 1988 allows taxpayers to deposit their capital gains proceeds in authorized banks to defer tax liability. If the deposited amount is not utilized within Two years (for purchase) or three years (for construction), it will be taxed as capital gains in the financial year the time limit expires.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Carry_Forward_of_Losses_from_House_Property\"><\/span><span style=\"color: #000080;\"><strong>Carry Forward of Losses from House Property: <\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"color: #000080;\"><strong>here is details of Set Off &amp; Carry Forward of Losses &amp; its <\/strong><strong>treatment of losses from house property under the new bill is as follows:\u00a0<\/strong><\/span><\/p>\n<ul>\n<li>LTCG losses: Can be set off only against Long-Term Capital Gains and carried forward for 8 years.<\/li>\n<li>No more indefinite loss carry-forward through mergers\u2014losses must expire within 8 years of their original computation year.\u00a0Companies engaging in mergers for tax benefits will need to reassess their strategies post-April 2025.<\/li>\n<li>STCG losses: Can be set off against both Long-Term Capital Gains &amp; short-Term Capital Gains and carried forward for 8 years. Losses can be carried forward only if ITR is filed before the due date.<\/li>\n<\/ul>\n<ul>\n<li>Set-Off Against Other Income: A loss from house property can be set off against income from other heads (e.g., salary, business income) up to a maximum of two lakh in a tax year.<\/li>\n<li>Carry Forward of Unabsorbed Losses: Any unabsorbed loss exceeding Two lakh can be carried forward for up to eight subsequent tax years. These carried-forward losses can only be set off against income from house property in the future years.<\/li>\n<\/ul>\n<p data-start=\"1818\" data-end=\"1862\"><span style=\"color: #000080;\"><strong>Example: How the Amendment Works<\/strong><\/span><\/p>\n<ul data-start=\"1863\" data-end=\"2477\">\n<li data-start=\"1863\" data-end=\"2195\">\n<p data-start=\"1865\" data-end=\"1892\">Before the Amendment: <em data-start=\"1897\" data-end=\"1908\">Company X<\/em> had a business loss in FY 2015-16 (AY 2016-17). The loss was eligible for carry forward until AY 2025-26. <em data-start=\"2029\" data-end=\"2040\">Company X<\/em> merged with <em data-start=\"2053\" data-end=\"2064\">Company Y<\/em> in 2023. <em data-start=\"2078\" data-end=\"2089\">Company Y<\/em> could restart the 8-year loss period, allowing the loss to be carried forward until AY 2031-32.<\/p>\n<\/li>\n<li data-start=\"2197\" data-end=\"2477\">\n<p data-start=\"2199\" data-end=\"2257\">After the Amendment (Applicable from April 1, 2025): The loss from AY 2016-17 will expire in AY 2025-26, even if <em data-start=\"2326\" data-end=\"2337\">Company X<\/em> merges with <em data-start=\"2350\" data-end=\"2361\">Company Y<\/em>. The merger does not extend the carry-forward period beyond 8 years from the original computation year.<\/p>\n<\/li>\n<\/ul>\n<p>It&#8217;s important to note that the ability to carry forward these losses is contingent upon filing the income tax return within the prescribed due date. Failing to do so may result in the forfeiture of this benefit.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Impact_of_Budget_2025_on_Section_87A_Applicability_on_Capital_Gains\"><\/span><span style=\"color: #000080;\"><strong>Impact of Budget 2025 on Section 87A Applicability on Capital Gains<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li>\n<h4><span class=\"ez-toc-section\" id=\"Under_the_Old_Tax_Regime\"><\/span><span style=\"color: #000080;\"><strong> Under the Old Tax Regime<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<ol>\n<li>No Change in Scope of Rebate \u2013 The rebate under Section 87A remains unchanged for taxpayers opting for the old tax regime in FY 2025-26 (AY 2026-27). Old Regime Still Beneficial in Certain Cases \u2013\n<ul>\n<li>Taxpayers whose income consists solely of capital gains taxed at special rates can still claim rebate under Section 87A if their taxable income does not exceed the prescribed limit.<\/li>\n<li>Taxpayers with a mix of slab rate income and capital gains taxed at special rates can also assess whether the old regime remains beneficial based on their specific income composition<strong>.<\/strong><\/li>\n<\/ul>\n<\/li>\n<\/ol>\n<\/li>\n<li>\n<h4><span class=\"ez-toc-section\" id=\"Under_the_New_Tax_Regime\"><\/span><span style=\"color: #000080;\"><strong> Under the New Tax Regime<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/li>\n<li style=\"list-style-type: none;\">\n<ul>\n<li>Budget 2025 Amendment:\u00a0The rebate under Section 87A is now limited only to tax computed as per slab rates under Section 115BAC(1A). This change applies from FY 2025-26 (AY 2026-27)<\/li>\n<li>FY 2024-25 (AY 2025-26): No Change in Scope \u2013 Until March 31, 2025, the rebate under the new tax regime applies to all income types, except LTCG from equity.<\/li>\n<li>FY 2025-26 (AY 2026-27): Major Restriction on Rebate\u00a0The rebate is only applicable on income taxed as per slab rates. No rebate is available for capital gains taxed at special rates.<\/li>\n<li>Key Impacts on Capital Gains from FY 2025-26 Onward:<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<table style=\"height: 364px;\" width=\"802\">\n<thead>\n<tr>\n<td>Type of Income<\/td>\n<td>Rebate Applicability (New Regime from FY 2025-26)<\/td>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>LTCG from Equity (Section 112A)<\/td>\n<td>\u274c Not Eligible<\/td>\n<\/tr>\n<tr>\n<td>STCG from Equity (Section 111A)<\/td>\n<td>\u274c Not Eligible<\/td>\n<\/tr>\n<tr>\n<td>LTCG from Debt Funds (Slab-based tax rate)<\/td>\n<td>\u2705 Eligible<\/td>\n<\/tr>\n<tr>\n<td>LTCG from Debt Funds (Special tax rate)<\/td>\n<td>\u274c Not Eligible<\/td>\n<\/tr>\n<tr>\n<td>STCG from Debt Funds (Taxed at slab rates)<\/td>\n<td>\u2705 Eligible<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>Old Tax tax regime remains attractive for certain taxpayers who can still claim a rebate u\/s 87A despite having capital gains taxed at special rates. New Tax Regime is now more restrictive, as rebate under Section 87A will not be available on special rate capital gains from FY 2025-26. Taxpayers should evaluate whether the old regime or new regime is more beneficial based on their income mix and eligibility for deductions\/exemptions.<\/p>\n<h3 data-start=\"0\" data-end=\"161\"><span class=\"ez-toc-section\" id=\"Comparison_of_deduction_of_interest_on_house_property_between_the_Old_Regime_and_the_New_Tax_Regime_under_Indian_Income_Tax_Law\"><\/span><span style=\"color: #000080;\">Comparison of <strong data-start=\"35\" data-end=\"78\">deduction of interest on house property<\/strong> between the <strong data-start=\"91\" data-end=\"105\">Old Regime<\/strong> and the <strong data-start=\"114\" data-end=\"132\">New Tax Regime<\/strong> under Indian Income Tax Law.<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-9215\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/02\/house.jpg\" alt=\"Deduction of Interest on House Property\" width=\"865\" height=\"560\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/02\/house.jpg 646w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/02\/house-300x194.jpg 300w\" sizes=\"(max-width: 865px) 100vw, 865px\" \/><\/p>\n<h3 data-start=\"197\" data-end=\"244\"><span class=\"ez-toc-section\" id=\"Deduction_of_Interest_on_House_Property\"><\/span><span style=\"color: #000080;\"><strong data-start=\"201\" data-end=\"244\">Deduction of Interest on House Property<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"_tableContainer_16hzy_1\">\n<div class=\"_tableWrapper_16hzy_14 group flex w-fit flex-col-reverse\" tabindex=\"-1\">\n<table class=\"w-fit min-w-(--thread-content-width)\" data-start=\"246\" data-end=\"1093\">\n<thead data-start=\"246\" data-end=\"414\">\n<tr data-start=\"246\" data-end=\"414\">\n<th data-start=\"246\" data-end=\"258\" data-col-size=\"sm\"><span style=\"color: #000080;\">S.No.<\/span><\/th>\n<th data-start=\"258\" data-end=\"288\" data-col-size=\"sm\"><span style=\"color: #000080;\">Particulars<\/span><\/th>\n<th data-start=\"288\" data-end=\"369\" data-col-size=\"md\"><span style=\"color: #000080;\">Old Regime<\/span><\/th>\n<th data-start=\"369\" data-end=\"414\" data-col-size=\"sm\"><span style=\"color: #000080;\">New Regime<\/span><\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"584\" data-end=\"1093\">\n<tr data-start=\"584\" data-end=\"753\">\n<td data-start=\"584\" data-end=\"595\" data-col-size=\"sm\">1<\/td>\n<td data-col-size=\"sm\" data-start=\"595\" data-end=\"627\">Self-Occupied Property<\/td>\n<td data-col-size=\"md\" data-start=\"627\" data-end=\"708\">Deduction up to \u20b92,00,000 under Section 24(b)<\/td>\n<td data-col-size=\"sm\" data-start=\"708\" data-end=\"753\">No deduction allowed<\/td>\n<\/tr>\n<tr data-start=\"754\" data-end=\"923\">\n<td data-start=\"754\" data-end=\"765\" data-col-size=\"sm\">2<\/td>\n<td data-start=\"765\" data-end=\"797\" data-col-size=\"sm\">Let-Out Property<\/td>\n<td data-col-size=\"md\" data-start=\"797\" data-end=\"878\">Interest deduction fully allowed<\/td>\n<td data-col-size=\"sm\" data-start=\"878\" data-end=\"923\">Allowed only up to rental income<\/td>\n<\/tr>\n<tr data-start=\"924\" data-end=\"1093\">\n<td data-start=\"924\" data-end=\"935\" data-col-size=\"sm\">3<\/td>\n<td data-col-size=\"sm\" data-start=\"935\" data-end=\"967\">Loss from House Property<\/td>\n<td data-col-size=\"md\" data-start=\"967\" data-end=\"1048\">Loss up to \u20b92,00,000 can be set off; excess carried forward for 8 years<\/td>\n<td data-col-size=\"sm\" data-start=\"1048\" data-end=\"1093\">Set-off not allowed<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<\/div>\n<h3 data-start=\"1100\" data-end=\"1125\"><span class=\"ez-toc-section\" id=\"Key_Implications_of_deduction_of_interest_on_house_property_between_the_Old_Regime_and_the_New_Tax_Regime\"><\/span><span style=\"color: #000080;\"><strong data-start=\"1104\" data-end=\"1125\">Key Implications of deduction of interest on house property between the Old Regime and the New Tax Regime<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul data-start=\"1127\" data-end=\"1530\">\n<li data-start=\"1127\" data-end=\"1235\">\n<p data-start=\"1129\" data-end=\"1235\">The Old Regime allows significant tax benefits on home loans, especially for self-occupied properties.<\/p>\n<\/li>\n<li data-start=\"1236\" data-end=\"1365\">\n<p data-start=\"1238\" data-end=\"1365\">The New Regime removes most exemptions\/deductions to offer lower tax rates but disallows home loan interest deductions.<\/p>\n<\/li>\n<li data-start=\"1366\" data-end=\"1530\">\n<p data-start=\"1368\" data-end=\"1530\">For rental properties, under the New Regime, the interest is deductible only to the extent of rental income, avoiding any notional or actual loss benefit.<\/p>\n<\/li>\n<\/ul>\n<h3 data-start=\"0\" data-end=\"158\"><span class=\"ez-toc-section\" id=\"Comparison_of_deductionsexemptions_available_under_the_New_Tax_Regime_vs_the_Old_Tax_Regime\"><\/span><span style=\"color: #000080;\"><strong data-start=\"27\" data-end=\"66\">Comparison of deductions\/exemptions<\/strong> available under the <strong data-start=\"87\" data-end=\"128\">New Tax Regime vs. the Old Tax Regime<\/strong>.\u00a0<\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-9217\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/02\/house-1.jpg\" alt=\"New Regime vs. Old Regime \u2013 Tax Benefits Comparison\" width=\"886\" height=\"723\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/02\/house-1.jpg 576w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/02\/house-1-300x245.jpg 300w\" sizes=\"(max-width: 886px) 100vw, 886px\" \/><\/p>\n<h3 data-start=\"165\" data-end=\"224\"><span class=\"ez-toc-section\" id=\"New_Regime_vs_Old_Regime_%E2%80%93_Tax_Benefits_Comparison\"><\/span><span style=\"color: #000080;\"><strong data-start=\"169\" data-end=\"224\">New Regime vs. Old Regime \u2013 Tax Benefits Comparison<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"_tableContainer_16hzy_1\">\n<div class=\"_tableWrapper_16hzy_14 group flex w-fit flex-col-reverse\" tabindex=\"-1\">\n<table class=\"w-fit min-w-(--thread-content-width)\" style=\"height: 244px;\" width=\"825\" data-start=\"226\" data-end=\"1056\">\n<thead data-start=\"226\" data-end=\"329\">\n<tr data-start=\"226\" data-end=\"329\">\n<th data-start=\"226\" data-end=\"238\" data-col-size=\"sm\">S.No.<\/th>\n<th data-start=\"238\" data-end=\"286\" data-col-size=\"sm\">Deduction \/ Exemption<\/th>\n<th data-start=\"286\" data-end=\"307\" data-col-size=\"sm\">New Regime<\/th>\n<th data-start=\"307\" data-end=\"329\" data-col-size=\"sm\">Old Regime<\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"433\" data-end=\"1056\">\n<tr data-start=\"433\" data-end=\"536\">\n<td data-start=\"433\" data-end=\"444\" data-col-size=\"sm\">1<\/td>\n<td data-start=\"444\" data-end=\"493\" data-col-size=\"sm\">House Rent Allowance (HRA)<\/td>\n<td data-col-size=\"sm\" data-start=\"493\" data-end=\"514\">\u274c Not Allowed<\/td>\n<td data-col-size=\"sm\" data-start=\"514\" data-end=\"536\">\u2705 Allowed<\/td>\n<\/tr>\n<tr data-start=\"537\" data-end=\"640\">\n<td data-start=\"537\" data-end=\"548\" data-col-size=\"sm\">2<\/td>\n<td data-col-size=\"sm\" data-start=\"548\" data-end=\"597\">Interest on Let-Out Property<\/td>\n<td data-col-size=\"sm\" data-start=\"597\" data-end=\"618\">\u2705 Allowed<\/td>\n<td data-col-size=\"sm\" data-start=\"618\" data-end=\"640\">\u2705 Allowed<\/td>\n<\/tr>\n<tr data-start=\"641\" data-end=\"744\">\n<td data-start=\"641\" data-end=\"652\" data-col-size=\"sm\">3<\/td>\n<td data-start=\"652\" data-end=\"701\" data-col-size=\"sm\">Interest on Self-Occupied Property<\/td>\n<td data-col-size=\"sm\" data-start=\"701\" data-end=\"722\">\u274c Not Allowed<\/td>\n<td data-col-size=\"sm\" data-start=\"722\" data-end=\"744\">\u2705 Allowed<\/td>\n<\/tr>\n<tr data-start=\"745\" data-end=\"848\">\n<td data-start=\"745\" data-end=\"756\" data-col-size=\"sm\">4<\/td>\n<td data-col-size=\"sm\" data-start=\"756\" data-end=\"805\">80CCD(2) \u2013 Pension Scheme Contribution<\/td>\n<td data-col-size=\"sm\" data-start=\"805\" data-end=\"826\">\u2705 Allowed<\/td>\n<td data-col-size=\"sm\" data-start=\"826\" data-end=\"848\">\u2705 Allowed<\/td>\n<\/tr>\n<tr data-start=\"849\" data-end=\"952\">\n<td data-start=\"849\" data-end=\"860\" data-col-size=\"sm\">5<\/td>\n<td data-col-size=\"sm\" data-start=\"860\" data-end=\"909\">Chapter VI-A Deductions (80C, 80D, etc.)<\/td>\n<td data-col-size=\"sm\" data-start=\"909\" data-end=\"930\">\u274c Not Allowed<\/td>\n<td data-col-size=\"sm\" data-start=\"930\" data-end=\"952\">\u2705 Allowed<\/td>\n<\/tr>\n<tr data-start=\"953\" data-end=\"1056\">\n<td data-start=\"953\" data-end=\"964\" data-col-size=\"sm\">6<\/td>\n<td data-col-size=\"sm\" data-start=\"964\" data-end=\"1013\">Standard Deduction \u2013 House Property<\/td>\n<td data-col-size=\"sm\" data-start=\"1013\" data-end=\"1034\">\u2705 Allowed<\/td>\n<td data-col-size=\"sm\" data-start=\"1034\" data-end=\"1056\">\u2705 Allowed<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<div class=\"sticky end-(--thread-content-margin) h-0 self-end select-none\">\n<div class=\"absolute end-0 flex items-end\"><\/div>\n<\/div>\n<\/div>\n<\/div>\n<p data-start=\"1063\" data-end=\"1088\"><span style=\"color: #000080;\"><strong data-start=\"1070\" data-end=\"1087\">Other Point Takeaways<\/strong>:<\/span><\/p>\n<ul data-start=\"1090\" data-end=\"1507\">\n<li data-start=\"1090\" data-end=\"1193\">\n<p data-start=\"1092\" data-end=\"1193\">Old Regime is suitable for those who have significant investments, loans, or eligible deductions.<\/p>\n<\/li>\n<li data-start=\"1194\" data-end=\"1301\">\n<p data-start=\"1196\" data-end=\"1301\">New Regime is better for those with fewer exemptions\/deductions, offering simplified lower tax rates.<\/p>\n<\/li>\n<li data-start=\"1302\" data-end=\"1406\">\n<p data-start=\"1304\" data-end=\"1406\">Some deductions like 80CCD(2) (employer\u2019s contribution to NPS) are allowed under both regimes.<\/p>\n<\/li>\n<li data-start=\"1407\" data-end=\"1507\">\n<p data-start=\"1409\" data-end=\"1507\">Major exclusions in New Regime: HRA, 80C, 80D, home loan interest (self-occupied).<\/p>\n<\/li>\n<\/ul>\n<h3><span class=\"ez-toc-section\" id=\"CII_for_FY_25-26_notified\"><\/span><span style=\"color: #000080;\"><strong>CII for FY 25-26 notified<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-9266\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/02\/CII-for-FY-25-26-notified.jpg\" alt=\"CII for FY 25-26 notified\" width=\"1080\" height=\"916\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/02\/CII-for-FY-25-26-notified.jpg 1080w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/02\/CII-for-FY-25-26-notified-300x254.jpg 300w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/02\/CII-for-FY-25-26-notified-1024x869.jpg 1024w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/02\/CII-for-FY-25-26-notified-768x651.jpg 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/02\/CII-for-FY-25-26-notified-800x679.jpg 800w\" sizes=\"(max-width: 1080px) 100vw, 1080px\" \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Taxation on Sale of Property under Income Tax Bill, 2025 The New Income Tax Bill, 2025, introduced in the Lok Sabha on February 13, 2025, aims to simplify and modernize India&#8217;s tax laws. While the bill largely aligns with the existing provisions of the Income-tax Act, 1961, it introduces certain changes concerning the taxation of &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[173],"tags":[734],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8640"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=8640"}],"version-history":[{"count":5,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8640\/revisions"}],"predecessor-version":[{"id":9267,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8640\/revisions\/9267"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=8640"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=8640"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=8640"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}