India tax

India indexation after July 2024: what changed for property and gold sales

By Teja Pagidimarri May 17, 2026 ~7 min read

Numbers updated… · sources

TL;DR

Budget 2024 (effective July 23, 2024) replaced the long-standing 20%-with-indexation regime for long-term capital gains on property and gold with a simpler 12.5% flat rate without indexation. Properties bought before that date get a one-time grandfathering option: pay the lower of the two computations. CII for 2024-25 is 363; base year 2001-02 is 100. Section 54 reinvestment relief continues. For most older properties, indexation still wins.

What changed on July 23, 2024

Until July 22, 2024, long-term capital gains on land, buildings, gold, and unlisted shares were taxed at 20% after indexation. Indexation lifted the cost basis using the Cost Inflation Index (CII) - so inflation-driven "gains" were not taxed.

Budget 2024 announced two changes effective July 23, 2024:

- Flat 12.5% tax on LTCG without indexation (for property, gold, unlisted shares). - The benefit of indexation was withdrawn for new sales of these assets.

For listed equity, the rate moved from 10% to 12.5% but the Rs 1.25 lakh exemption continues. Debt mutual funds (post-April 2023) remain at slab rates and get neither indexation nor 12.5% relief.

Grandfathering for older property

After backlash from middle-class property owners, the Finance Act introduced a one-time relief for properties acquired before July 23, 2024:

For each such property, taxpayers may compute LTCG under both methods and pay the lower tax:

1. 20% on (sale price - indexed cost using CII) 2. 12.5% on (sale price - actual cost, no indexation)

This grandfathering applies to land and buildings only - not gold, debt funds, or unlisted shares. It is a per-transaction choice, computed automatically in the ITR.

The practical effect: most properties held 7+ years still benefit from indexation. Recently bought properties (held 2-3 years) tend to favour the 12.5% flat option.

Worked example: 2010 purchase, 2024-25 sale

Suppose Ramesh bought a flat in Pune in FY 2010-11 for Rs 50,00,000 and sells it in FY 2024-25 for Rs 1,60,00,000.

Method 1: 20% with indexation Indexed cost = 50,00,000 x (363 / 167) = Rs 1,08,68,263 LTCG = 1,60,00,000 - 1,08,68,263 = Rs 51,31,737 Tax = 20% x 51,31,737 = Rs 10,26,347

Method 2: 12.5% flat LTCG = 1,60,00,000 - 50,00,000 = Rs 1,10,00,000 Tax = 12.5% x 1,10,00,000 = Rs 13,75,000

Lower of the two = Rs 10,26,347. Indexation method wins by Rs 3.5 lakh. Add 4% cess and any surcharge.

Property bought 2010 for Rs 50L, sold 2024-25 for Rs 1.6Cr (LTCG comparison)

20% with indexation (CII method)

Rs 416,000

12.5% flat without indexation

Rs 1,375,000

Lower of the two = Rs 4.16 lakh tax under grandfathering rules. CII 2010-11=167, 2024-25=363.

A simpler heuristic: if held longer than ~7-8 years, indexation usually wins. Held under 4 years (long-term threshold for property is 24 months), the flat 12.5% often wins.

Section 54: reinvestment still works

Section 54 (residential property) and Section 54F (any LTCG into a new house) continue under both old and new regimes:

- Section 54: invest LTCG into one new residential house within 2 years (3 years for under-construction). Lifetime cap of two houses for the section. - Section 54EC: invest LTCG into NHAI or REC bonds (5-year lock-in) within 6 months. Cap Rs 50 lakh per FY. - Section 54F: any LTCG (gold, shares) into one new house, conditions on existing properties.

Reinvestment relief is computed before the 12.5% / 20% choice. So if you fully reinvest, neither rate applies.

For flat purchasers in metros, Section 54 continues to be the cleanest route to defer or eliminate property LTCG.

Asset-by-asset summary

Real estate (land, building): 12.5% flat from July 23, 2024. Grandfathering for pre-July 2024 acquisitions.

Gold (physical, jewellery): 12.5% flat post-July 2024. No grandfathering. Holding period now 24 months for long-term (was 36).

Sovereign Gold Bonds (SGB): capital gains on redemption to RBI remain tax-free. On secondary-market sale, 12.5% flat applies post-July 2024.

Listed equity (shares, equity MFs): 12.5% over Rs 1.25 lakh exemption (was 10% over Rs 1 lakh). STCG raised to 20% (was 15%).

Unlisted shares: 12.5% flat without indexation post-July 2024.

Debt mutual funds (post-April 2023 purchases): slab-rate taxation only. No 12.5% benefit, no indexation.

Run the math for your situation

Use our IN India calculator to plug in your own numbers and see exactly what you owe / save.

Frequently asked questions

Quick answers people search for.

Did indexation get fully removed in July 2024?

For new property and gold sales, yes. But pre-July 2024 property sales get a one-time grandfathering: pay lower of 20%-with-indexation or 12.5%-flat. Each transaction is computed both ways automatically in the ITR.

What is CII for 2024-25?

The Cost Inflation Index for FY 2024-25 is 363. Base year 2001-02 is 100. Property bought before April 1, 2001 may use the fair market value as on April 1, 2001 as the cost (with valuation report).

Does the grandfathering apply to gold?

No - the dual-method choice is only for land and buildings. Gold sales after July 23, 2024 attract a flat 12.5% without indexation, regardless of when bought.

Can I still use Section 54 reinvestment after the change?

Yes - Section 54, 54F and 54EC continue. Reinvestment is computed first; only residual LTCG is taxed at 12.5% (or 20% with indexation under grandfathering).

What if I sold before July 23, 2024?

Sales before that date are taxed entirely under the old regime - 20% with indexation. No choice; the flat 12.5% only applies from July 23, 2024 onwards.

Key takeaways

Long-term vs short-term gains: holding period determines the rate, often by 10-30 percentage points.
Tax-loss harvesting can offset realised gains and (in the US) up to $3,000 of ordinary income per year.
Wash-sale rule (US): no buying substantially identical security within 30 days of the loss sale.
Inherited assets get a step-up in basis (US) - pay capital gains only on appreciation after inheritance.
Spouse splitting doubles the UK GBP 3,000 CGT annual allowance.
1031 exchanges defer US real estate capital gains indefinitely; heirs then get a basis step-up.

By audience: what to focus on

Different reader types need different angles on this topic. Pick the one closest to your situation.

Salaried employees

Maximise tax-advantaged retirement contributions (EPF/401(k)/SIPP/RRSP). Check whether your country prefers the old vs new regime, employer-match thresholds, and salary-sacrifice options. Use the calculators below with your CTC / gross income.

Freelancers / self-employed

You bear higher self-employment tax + lose the employer match, but get access to higher contribution limits (Solo 401k, SEP-IRA, NPS Tier-I). Track business expenses meticulously. Quarterly estimated tax payments avoid underpayment penalty.

NRIs / expats

Tax residency rules (183-day, tie-breaker), double-taxation treaties, foreign tax credits all come into play. NRI restrictions on PPF (no new accounts) but expanded options on NPS. Cross-border income often needs specialist advice.

Retirees / pre-retirees

Sequence-of-returns risk in early retirement is the largest threat. Glide-path asset allocation, Roth-conversion analysis in low-income years, Required Minimum Distribution planning, and Medicare/healthcare gap funding (US) are the big items.

Quick reference: 12 specific scenarios

Scan the question list, expand only the rows that match your situation.

What's the difference between short-term and long-term capital gains?

Most countries tax long-term gains (assets held over a threshold) at lower rates than short-term gains. US thresholds: 12 months. UK: no holding period for general CGT. India: 12 months for listed equity, 24 months for property. The holding period change can swing the tax bill by 10-30 percentage points.

How does indexation work for capital gains tax?

Indexation adjusts the purchase price upward by inflation, reducing the taxable gain. Available in India (12.5% LTCG with indexation choice on real estate as of Budget 2024), UK (limited circumstances). The CII (Cost Inflation Index) determines the adjustment factor in India.

What is wash-sale rule and how do I avoid it?

US: selling a security at a loss and buying a 'substantially identical' security within 30 days before or after disallows the tax loss. The loss is added to the cost basis of the replacement security instead. To avoid: wait 31 days OR buy a similar-but-not-identical alternative (e.g., S&P 500 ETF instead of S&P 500 index fund).

How are capital gains on inherited property taxed?

US: stepped-up basis at date of death - heirs pay capital gains only on appreciation after the inheritance date. India: stepped-up basis at date of death with FMV. UK: spouse exemption + step-up. Canada: deemed disposition at fair market value on death (treated as a sale).

Can I offset capital gains with capital losses?

Yes in most countries. Losses can offset gains in the same year. Unused losses typically carry forward indefinitely (US: $3,000/year against ordinary income; UK: only against future gains; India: STCL can offset both STCG and LTCG, LTCL only against LTCG).

What is 1031 exchange (US) and how does it defer capital gains?

Sell an investment property and buy a like-kind replacement within 180 days (with 45-day identification window). The gain is deferred - the basis carries over to the new property. Stack 1031s indefinitely and heirs get a step-up at inheritance, eliminating the deferred tax entirely.

How are crypto capital gains taxed?

In most countries (US, UK, Canada, Australia), crypto is treated as property - every sale, swap, or spending is a taxable event with normal short/long-term rules. India taxes crypto gains at flat 30% with no loss offset against other income, plus 1% TDS on transfers.

What is the annual CGT allowance in the UK?

GBP 3,000 of capital gains per tax year is tax-free (down from GBP 12,300 a few years ago). Spouse splitting doubles the allowance. Above the allowance, basic-rate taxpayers pay 10%, higher-rate 20% on most assets; residential property attracts higher 18%/24% rates.

How do I report capital gains on my tax return?

US: Schedule D + Form 8949. UK: capital gains report or Real-Time CGT online service for property. India: Schedule CG in ITR-2/3 with separate STCG and LTCG sections. Keep cost basis records for at least 7 years after the asset is sold.

Are gains from primary residence sale tax-free?

US: up to $250,000 single / $500,000 MFJ exclusion if owned and lived in the home 2+ of the last 5 years. UK: Private Residence Relief fully exempts the primary home. India: Section 54 lets you reinvest the LTCG into another residential property to defer tax.

How does opportunity zone investment defer capital gains?

US: invest realised capital gains into Qualified Opportunity Funds within 180 days. Original gain deferred until 2026 tax year (or earlier sale). Hold the QOF investment 10+ years and ALL appreciation in the QOF is permanently tax-free.

Should I harvest gains in a low-income year?

Yes. The US 0% long-term capital gains bracket extends to about $47,000 single income. If you have a sabbatical / career break / gap year, you can sell appreciated long-term positions and reset your cost basis to current price for free. Same applies to Roth conversions in low-income years.

Sources and methodology

Numbers on this page are sourced from official government / regulator websites and refreshed automatically every Sunday by our build pipeline. Hover any number with a dotted underline to see its source and as-of date.

Tax authorities cited (8 jurisdictions)

Specific values cited

Reference	Value	Source	As of
`ae.gratuity.cap`	2 years	UAE Labour Law	2021-02-02
`in.ltcg.equity.exempt`	₹1.25 lakh	CBDT	2024-07-23
`in.ltcg.equity.rate`	12.5%	CBDT	2024-07-23

Methodology: each calculator linked from this post documents its formula. Live market data (FX, treasury yields, mortgage rates) is pulled from public APIs (exchangerate.host, FRED, BoE, ECB, BoC, CoinGecko, stooq).