Under Section 194-IA of the Income Tax Act, 1961, when purchasing immovable property (except agricultural land) valued at ₹50 lakh or more from a resident seller, the buyer is required to deduct 1% Tax Deducted at Source (TDS) on the consideration amount. This TDS must be deposited with the government within 30 days from the end of the month in which the deduction is made by filing Form 26QB electronically. The buyer must also issue Form 16B, a TDS certificate, to the seller as proof of deduction.

If the seller is a non-resident Indian (NRI) or foreign national, then Section 195 applies instead. TDS rates and procedures differ under Section 195 based on income tax slabs applicable to NRIs.

If the seller does not provide their Permanent Account Number (PAN), then TDS must be deducted at 20% (higher rate).

The Stamp Duty Value (SDV), also called the circle rate or guidance value, is the government-assessed minimum value of a property for registration and tax purposes.

As per Section 50C and Section 56(2)(x) of the Income Tax Act, if the SDV exceeds the actual sale price by more than 10% (i.e., SDV > 110% of sale price), then the SDV will be deemed the full value of consideration for capital gains tax calculations on the seller.

If the SDV is considered as sale consideration for the seller due to the “Rule of 110%”, then the buyer’s purchase cost for calculating future capital gains will be the SDV, not the actual price paid. This ensures parity between the seller’s gain and the buyer’s cost.

If the seller disputes the SDV, the Assessing Officer (AO) can seek a valuation by a Departmental Valuation Officer (DVO). The value given by the DVO, if lower than the SDV, is accepted by the AO as the sale consideration for tax purposes. This ensures the seller is not unfairly taxed at inflated values.

Short-Term Capital Gains (STCG) arise when a property is sold within 24 months (2 years) from acquisition. STCG is added to the seller’s total income and taxed at their applicable income tax slab rates, which can be as high as 42.7% including cess and surcharge depending on income.

With effect from July 23, 2024, the government has introduced a uniform LTCG rate:

For properties sold on or after 23 July 2024:

• LTCG tax is a flat 12.5%, without indexation of the purchase cost.

For properties acquired before 23 July 2024, taxpayers may opt between the old indexed method (20%) or new 12.5% flat rate..

You can gift immovable property to specified relatives (parents, siblings, children, spouse, etc.) without incurring income tax. Stamp duty applies on gift deeds as per state regulations, usually at concessional rates. Gifts to non-relatives exceeding ₹50,000 in value are taxed as income for the recipient.

Under Section 54, capital gains arising from the sale of a residential house can be exempted if the gains are reinvested in buying or constructing another residential house:

• The new property should be purchased either 1 year before or 2 years after the date of sale, or constructed within 3 years from the date of sale.
• If the capital gain is up to ₹2 crore, you can buy or construct two residential houses to claim exemption.

Yes, if the capital gains are up to ₹2 crore, Section 54 allows reinvestment in two new residential houses for exemption. Both houses must be purchased or constructed as per the timelines above.

Section 54F applies when you sell any capital asset other than a residential house (like land, commercial property) and invest the entire net sale proceeds into a residential house. Only one residential house qualifies under 54F — investment in two houses is not allowed.

No. The exemption to buy two houses applies only under Section 54 for residential properties sold with capital gains up to ₹2 crore. For Section 54F, which applies to sale of non-residential assets, only one house can be purchased for exemption.

Under Section 54EC, up to ₹50 lakh capital gains can be invested in notified long-term bonds (NHAI, REC, etc.) within 6 months from the date of sale. These bonds have a 5-year lock-in. This investment exempts the amount invested from capital gains taxation.

If you cannot invest the sale proceeds in the specified assets before filing income tax returns, you can deposit the amount in a CGAS, a special account set up to hold gains temporarily, allowing you to claim the exemption later.

Yes, but with conditions: Section 54 applies on the sale of a residential house, Section 54F on the sale of non-residential assets, and Section 54EC on all capital gains. Thus, if eligible separately, you can claim exemptions under all on different capital gains.

Use Section 54F by investing the net sale proceeds in a residential house to claim exemption from capital gains tax. Alternatively, invest up to ₹50 lakh in 54EC bonds to save tax on capital gains.

Missing timelines for reinvestment (1-2 years purchase, 3 years construction), not reinvesting the entire net sale proceeds (Section 54F), or ignoring TDS documentation and refund claims.

If you own more than two self-occupied properties and keep them vacant, they are taxable on notional rent (expected rental income). Recent 2025 amendments allow up to two self-occupied properties with nil annual value (subject to prevailing rules).

No direct deduction. Municipal taxes paid are deductible from gross rental income, then a standard deduction of 30% of Net Annual Value (NAV) is allowed for repairs, maintenance, and insurance, regardless of the actual amount spent.

Yes. The total interest paid during the pre-construction period is accumulated and can be claimed in five equal annual installments from the year construction is completed.

Principal repayment up to ₹1.5 lakh is deductible under Section 80C annually. Interest up to ₹2 lakh is deductible for a self-occupied property under Section 24b. For let-out property, the entire interest paid is deductible.

Income and deductions are allocated based on ownership shares. Each owner declares their share of income and expenses in their tax return.

Municipal Property Tax: Local tax on property levied by the municipality for civic services. Income Tax on Property: Tax on rental or notional income from the property.

The builder must register the project with RERA, submit project details, and deposit 70% of advance funds into an escrow. Buyers can check the RERA portal for compliance.

Circle Rate is the minimum government-fixed price for property registration. Stamp Duty Value (SDV) is the stamp duty base — the higher of the sale price or the circle rate.

Mutation means updating municipal or revenue records to record new ownership after a sale. It is necessary for property tax billing and utility connection transfers.

Get an Encumbrance Certificate, check the RERA portal for builder complaints, and search public court records for property ownership disputes.

NRIs can buy residential and commercial properties but not agricultural land or farmhouses unless inherited or converted.

TDS is deducted under Section 195 at: 20% for LTCG (or 12.5% flat depending on the sale date) and 30% for STCG. NRIs may apply for a Lower Deduction Certificate (LDC) if applicable.

NRIs can repatriate up to USD 1 million per financial year through their NRO account after submitting Form 15CA and 15CB and following RBI banking procedures.

Foreign nationals can buy residential or commercial property with prior approval from the Reserve Bank of India (RBI), except for agricultural land, farmhouses, or plantations.

Stamp duty and registration charges apply on the market or circle rate. GST applies only if buying developed plots or plots bundled with under-construction properties.

You need a local authority’s building plan approval, a commencement certificate for starting construction, water and electricity connection approvals, and land use conversion (CLU) if the land is agricultural.

Only if the land is duly converted to non-agricultural use. Building a permanent residence on agricultural land is generally illegal without a formal Change of Land Use (CLU) approval.

You must apply to the revenue or planning department with your sale deeds and land details. The process includes an inspection, public notice, and final CLU certificate issuance. Unauthorized construction risks penalties.

No. Without a legal partition deed or written consent from all co-owners, construction by a part-owner alone is not legally valid.

Yes. Multiple investors can own undivided shares, documented clearly. Sale or construction must be agreed upon by all, or shares partitioned.

The main documents are the registered Sale Deed, the Mutation certificate, the Encumbrance certificate, and the Occupancy certificate (for residential buildings).

Utilize exemptions under Section 54, 54F, 54EC and invest in property/bonds timely or deposit in the Capital Gains Account Scheme (CGAS) but these are vailable only under the old tax regime. Not applicable if you opt for the new regime..

Besides the sale price, these include stamp duty, registration, brokerage, legal fees, loan processing, insurance, municipal taxes, and maintenance and society charges.

Verify the title, builder credentials and RERA, check for encumbrance, and litigation, and use professional lawyers before buying.

A legal document authorizing someone to act on your behalf for a sale/purchase. It should be registered to be legally valid.

Yes, most states provide online registration portals with Aadhaar-based authentication for quicker and more secure registration.

Introduction of a 12.5% flat LTCG tax from July 2024, relaxation on notional rent taxation on a second house, enhanced digitization, and a transition away from indeterminate indexation benefits for LTCG.

Section 24(b) allows you to deduct interest paid on home loans. For self-occupied homes, the maximum deduction is capped at ₹2 lakh annually, while for let-out properties, the entire interest paid is deductible without limit. Pre-construction interest can also be claimed in 5 equal installments.

Section 54B exempts capital gains tax when agricultural land (held for at least 2 years) is sold and the proceeds are reinvested in new agricultural land within 2 years. The exemption is limited to the lesser of the capital gains or the cost of the new land.

Section 80C allows a maximum deduction of ₹1.5 lakh annually on certain expenses, including the principal repayment of housing loans, stamp duty, and registration fees paid during property purchase.

Section 80EEA: Additional deduction up to ₹1.5 lakh for interest on affordable housing loans sanctioned between April 1, 2019, and March 31, 2022. Section 80EE: Deduction up to ₹50,000 for interest on home loans for first-time buyers sanctioned between April 1, 2016, and March 31, 2017.

The 30% standard deduction is a flat allowance to cover maintenance, repairs, etc. It is applied on the Net Annual Value (NAV), which is calculated after deducting municipal property taxes from the gross rental income.

Up to ₹2 lakh of house property loss can be set off against other income (like salary) in the same financial year. Remaining loss can be carried forward for 8 years, but only against house property income subsequently.

The Old Regime allows deductions under sections 24(b), 80C, standard deductions, and loss set-offs. The New Regime (Section 115BAC) removes most property-related deductions for a self-occupied property but keeps a lower tax slab rate.

No. Taxpayers opting for the new tax regime pay tax on full capital gains without exemptions or indexation benefits under these sections. These exemptions remain available only under the old tax regime.

• Section 54: Exemption on capital gains reinvested up to two houses if gain ≤ ₹2 crore. The exemption has been capped at ₹10 crore from 1 April 2024.
• Section 54B: Exemption limited to the lesser of capital gains or cost of new agricultural land.
• Section 54EC: Max ₹50 lakh investment in bonds within 6 months.
• Section 54F: Second house benefit not available in 54F. Maximum exemption capped at ₹10 crore from April 1, 2024.
• Section 24(b): Max ₹2 lakh deduction per annum for self-occupied properties’ home loan interest; unlimited for let-out properties.

Starting April 1, 2024, a cap of ₹10 crore was introduced for the maximum exemption allowed under Section 54F. This means even if the amount invested in a new residential house exceeds ₹10 crore, only ₹10 crore will be considered for capital gains exemption calculation.

Section 54 applies when you sell a residential house and reinvest the capital gains in another residential house. Section 54F applies when you sell any other capital asset (e.g., land, commercial property, shares) and invest the sale proceeds in a residential house. While Section 54 can be used for two houses (once in a lifetime) if the gain is up to ₹2 crore, Section 54F is limited to one residential house.