Selling a Gurgaon property in 2026: what capital gains tax actually costs you now
The rate changed in July 2024, the section numbers changed on 1 April 2026, and the relief that softened the blow does not apply to everyone. A current, cited walk-through — including the one number most articles still get wrong.
Two things changed, and most published guidance has caught up with neither.
The first was July 2024, when long-term capital gains on immovable property moved to a flat 12.5% without the benefit of indexation, replacing 20% with indexation. The second was 1 April 2026, when the Income-tax Act, 2025 came into force and renumbered the provisions everyone quotes from memory.
Section 54 is now section 82. Section 54EC is section 85. Section 54F is section 86. The substance largely carried over, but a 2026 article still citing only the 1961 numbering is quoting a repealed statute.
The basic position on a Gurgaon sale
| Question | Answer |
|---|---|
| How long to be long-term? | More than 24 months of holding |
| Long-term rate | 12.5%, without indexation |
| Short-term rate | Your normal slab rates |
| Reinvest in a house | Section 82 (formerly 54) or 86 (formerly 54F) |
| Reinvest in bonds | Section 85 (formerly 54EC) — ₹50 lakh cap |
| Exemption ceiling | ₹10 crore on the reinvestment reliefs |
Section numbers are those of the Income-tax Act, 2025, in force from 1 April 2026. Former 1961 Act numbers in brackets.
The grandfathering relief — and its two limits
If you acquired the property before 23 July 2024, you may pay the LOWER of 12.5% without indexation or 20% with indexation. That protects long-held Gurgaon property bought in the 2000s, where indexation does real work.
Limit one: the relief is confined to an individual or Hindu undivided family being a RESIDENT. Non-residents are excluded — an NRI selling a Gurgaon flat held since 2005 does not get the choice.
Limit two: the mechanism is a tax comparison, not a recomputation of the gain. The excess tax is ignored. It therefore cannot create a loss, or enlarge one, for you to carry forward.
The 110% rule — where the sale price is below circle rate
If you sell below the stamp-duty (circle) value, the deeming provision substitutes the circle rate as your sale consideration and taxes you on a gain you did not receive. There is a safe-harbour tolerance band: the substitution does not apply while the stated consideration is at least 90% of the stamp value — that is, while the stamp value does not exceed 110% of the price.
The band is 110%. It was raised from 105% by the Finance Act, 2020, and 105% remains one of the most commonly repeated stale figures in Indian tax blogging. Gurgaon circle rates were revised with effect from 1 April 2026, so this is live: check the current rate for your sector before agreeing a price.
The buyer has a mirror exposure — the difference can be taxed in the buyer's hands as income from other sources.
The three reinvestment routes
Section 82 (formerly 54) — house to house
Sell a residential house, buy another one within one year before or two years after the sale, or construct within three years. The gain is exempt to the extent reinvested, subject to the ₹10 crore ceiling.
Section 86 (formerly 54F) — any other asset into a house
Sell a long-term asset that is not a residential house — land, for instance — and invest the NET CONSIDERATION, not merely the gain, in one residential house. The same ₹10 crore ceiling applies. The 'net consideration' distinction is where most claims fail.
Section 85 (formerly 54EC) — land or building into bonds
Invest the gain in notified bonds within six months of transfer. Capped at ₹50 lakh across the year of transfer and the following year taken together, with a five-year lock-in. Useful when you do not want another property.
If you cannot reinvest before the filing date
Park the amount in the Capital Gains Account Scheme before your return-filing due date, and the exemption is preserved while you look for a property. Money left unspent by the end of the statutory window becomes taxable in that later year — the scheme buys time, not an exemption.
Working out the gain itself
Your cost of acquisition includes what you paid, and the stamp duty, registration and brokerage that went with it. Cost of improvement covers capital additions, not repairs or repainting. Keep the receipts; a claim without documentation tends not to survive scrutiny.
Where indexation applies under the grandfathering route, the Cost Inflation Index has a base year of 2001-02. Property acquired before 1 April 2001 uses the fair market value on that date as the starting point.
One genuinely contested item: whether home-loan interest already claimed as a deduction can also be added to the cost of acquisition. Case law has gone both ways. Treat any confident answer you read online with suspicion, and take advice on your own facts.
Selling as an NRI is a different problem
TDS on a purchase from a non-resident is deducted on the WHOLE consideration, not on the gain, unless a lower-deduction certificate is obtained first. It is the single most expensive thing to discover after the deal is agreed. We cover the mechanics, the certificate and the timing separately in our guide for NRI sellers.
Before you agree a price
- Confirm the holding period crosses 24 months — a few weeks can change the rate materially
- Check the current circle rate for the sector and keep the price within the 110% band
- If you bought before 23 July 2024 and are resident, compute both ways and take the lower
- If you are non-resident, assume the grandfathering choice is not available to you
- Decide the reinvestment route before signing, not after — the six-month bond window is short
- Assemble purchase-cost documentation now, not at filing time
This is general information, not tax advice. The numbers above are statutory; how they apply to your sale is not. Take a chartered accountant through your actual figures.
Sources & citations›
- Income-tax Act, 2025 (Act No. 30 of 2025, assented 21 August 2025), in force 1 April 2026 — section 197(1)(b) long-term rate of 12.5%; section 197(3) grandfathering confined to a resident individual or HUF for land or building acquired before 23 July 2024; section 82 (formerly 54); section 85 (formerly 54EC); section 86 (formerly 54F).
- Finance (No. 2) Act, 2024 — shift to 12.5% without indexation for immovable property from 23 July 2024.
- Finance Act, 2023 — ₹10 crore ceiling on the reinvestment exemptions, applicable from assessment year 2024-25.
- Finance Act, 2020 — safe-harbour tolerance band on the stamp-duty deeming provision raised from 105% to 110%.
- Cost Inflation Index base year 2001-02, as notified by the Central Board of Direct Taxes.
- Gurgaon circle rates revised with effect from 1 April 2026 — see Villow's circle-rate guide.
- Not stated here: any new-Act section number we could not verify against the gazetted text, and any assertion on the treatment of home-loan interest in cost of acquisition, which remains contested.
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