Dear Sir, I had a flat whose cost was 34 lac, bought in the year 2015, I had sold my flat for 1.2cr in March 2026 Then I bought another flat for 76 lac in April 2026, Pls explain me the capital gain on the sale and purchase, also I request you to suggest ways to save my tax. Thanks

Ans: You have already taken a very good step by purchasing another residential flat immediately after selling the old one. This can help you save a substantial portion of capital gains tax.

» Nature of Capital Gain

Since the flat was purchased in 2015 and sold in March 2026, the gain will be treated as Long Term Capital Gain (LTCG)
LTCG on property is taxed at 20% with indexation benefit

» How Capital Gain is Calculated
Capital gain is not calculated simply as:
Sale Price – Purchase Price

You will get:

Indexed cost benefit on your original purchase cost
Deduction for eligible expenses like:
Registration charges
Brokerage
Major renovation/improvement expenses

This indexed cost significantly reduces taxable gain.

» Benefit of New Flat Purchase

You sold old property in March 2026
Bought new flat in April 2026 for Rs 76 lakh

This qualifies for exemption under Section 54.

Meaning:

Amount invested in new residential property can be reduced from capital gains

So your taxable capital gain will reduce substantially.

» Important Clarification

Tax exemption is linked to the capital gain amount, not entire sale value
If full capital gain is not invested, balance gain becomes taxable

» Additional Tax Saving Options
If any capital gain still remains taxable, you may consider:

Investing in specified Capital Gain Bonds within 6 months
This can further reduce tax liability

» Important Conditions

New property should not be sold within 3 years
Keep all purchase/sale documents safely
Maintain proof of payment and registration

» Finally

Your gain will be treated as Long Term Capital Gain
You will get indexation benefit
Purchase of new flat for Rs 76 lakh will help reduce tax significantly under Section 54
Remaining taxable gain, if any, can be managed through capital gain bonds

A proper indexed calculation by a Chartered Accountant will give exact tax liability.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in

https://www.linkedin.com/in/ramalingamcfp/