Capital Gains Tax — The Numbers You Need to Know
When you sell a Lodha property, the profit (sale price minus purchase cost) is a capital gain. The tax you pay depends on two things: how long you held the property and which exemptions you use.
STCG vs LTCG: The 2-Year Threshold
| Holding Period | Gain Type | Tax Rate |
|---|---|---|
| Under 24 months from possession | Short-Term Capital Gain (STCG) | Your income slab rate (20–30%) |
| 24 months or more from possession | Long-Term Capital Gain (LTCG) | 20% with indexation |
Note on under-construction property: The 2-year holding period for under-construction property is calculated from the date of possession (or allotment letter, per case law — verify with your CA). Buying Lodha Altero now and selling after receiving possession in 2030 and holding 2+ years means LTCG applies.
What “20% with Indexation” Actually Means
Indexation adjusts your purchase price for inflation using the Cost Inflation Index (CII), reducing your taxable capital gain.
Example: Lodha Panache 2 BHK
| Amount | |
|---|---|
| Purchase price (2026, all-in) | ₹1,30,00,000 |
| Sale price (2031, base case) | ₹1,90,00,000 |
| Nominal gain | ₹60,00,000 |
| Indexed purchase cost (CII adjustment, ~22% over 5 years) | ₹1,58,60,000 |
| Indexed gain | ₹31,40,000 |
| LTCG tax (20%) | ₹6,28,000 |
Without indexation, the tax would be ₹12 lakh. With indexation: ₹6.28 lakh. Indexation halves your tax bill.
Important update (Budget 2024): For properties sold after July 23, 2024, taxpayers can choose between:
- 12.5% LTCG without indexation
- 20% LTCG with indexation
For properties held 5+ years where inflation-adjusted gains are high, 20% with indexation typically remains better. For shorter holds where gains are modest, 12.5% without indexation may win. Run both calculations before selling.
Section 54 — Reinvestment Exemption
What it does: Exempts your LTCG if you reinvest the gains in another residential property.
Conditions:
- Property sold must be a residential property (apartments qualify)
- Purchase new residential property 1 year before or 2 years after sale
- OR construct a new residential property within 3 years of sale
- New property must be in India
- Cannot sell the new property within 3 years
How much is exempt: The entire capital gain is exempt if the new property costs ≥ the capital gain. If new property costs less, proportionate exemption.
Example for Lodha Belmondo Resale
You sell Belmondo 2 BHK in 2028 with ₹25 lakh LTCG. You buy a flat in Hinjewadi (Lodha Magnus) for ₹1.70 Cr.
- Capital gain: ₹25 lakh
- New property cost: ₹1.70 Cr (exceeds gain)
- Tax exempted: Full ₹25 lakh
- LTCG tax payable: ₹0
This is the most powerful exemption for property investors who plan to upgrade (sell Belmondo, buy Panache; sell Panache, buy Altero).
Section 54EC — Bond Investment Exemption
What it does: Exempts LTCG up to ₹50 lakh if invested in specified bonds within 6 months of sale.
Eligible bonds: NHAI (National Highways Authority of India) and REC (Rural Electrification Corporation) 54EC bonds. Lock-in: 5 years. Redemption before 5 years means tax reversal. Interest rate: Approximately 5.25% per annum (taxable). Maximum exemption: ₹50 lakh per financial year.
When to Use 54EC vs Section 54
| Scenario | Better Exemption |
|---|---|
| Planning to buy another property within 2 years | Section 54 (larger exemption, no cap) |
| Not buying another property; gain < ₹50L | Section 54EC bonds |
| Gain > ₹50L and not buying another property | 54EC for ₹50L + pay tax on balance |
Capital Gains Account Scheme (CGAS)
If you sell but haven’t found a new property by the ITR filing date (July 31 of the assessment year), deposit unutilised gains in a Capital Gains Account Scheme (CGAS) bank account. This preserves the Section 54 exemption while you search for a property. Funds must be used for property purchase/construction within the stipulated timeframe.
TDS When Selling (NRI Sellers)
If you are an NRI selling your Lodha property, the buyer must deduct TDS at source:
- LTCG property (2+ years): 20% TDS on full sale consideration
- STCG property: 30% TDS on full sale consideration
This means: If you sell Belmondo for ₹1.50 Cr, the buyer holds back ₹30L as TDS. You recover the excess via ITR refund after claiming indexation and exemptions.
Apply for lower TDS certificate (Section 197) in advance if your actual tax liability will be lower than the TDS rate — this avoids the cash flow hit.
Practical Planning for Lodha Investors
If you bought Belmondo RTM in 2024 and plan to sell in 2026:
- Possession in 2024; sale in 2026 = exactly 2 years. Verify with your CA whether this qualifies as LTCG — the date counting matters.
If you bought Panache at booking in 2024 and possess in March 2027:
- Earliest LTCG-eligible sale: March 2029 (2 years from possession)
- Plan resale timelines backward from this date
If you bought Altero in 2026 and possess in June 2030:
- Earliest LTCG sale: June 2032
- Buy-and-hold investors: target 2032+ resale for LTCG benefit
Frequently Asked Questions
Q: What is the capital gains tax on selling my Lodha flat? LTCG (2+ year hold): 20% with indexation or 12.5% without (choose whichever is lower for your situation). STCG (under 2 years): your income slab rate (30% for ₹10L+ income).
Q: How can I save tax on selling Lodha Belmondo? Reinvest gains in another residential property within 2 years (Section 54) or invest in 54EC bonds within 6 months (up to ₹50L). Claim full indexation to reduce taxable gain.
Q: Is there TDS when selling Lodha property? For resident sellers: buyer deducts 1% TDS if sale price exceeds ₹50L. For NRI sellers: buyer deducts 20% LTCG TDS (apply for lower certificate if actual tax is lower).
