Sold property? You may pay zero tax if these Section 82 rules under Income Tax Act 2025 are met

For Tax Year 2026-2027, Income Tax Act, 2025 is applicable and this means you need to be versed with the renumbered Sections in order to continue your financial plan as usual. If you want to claim income tax exemption on selling property then note that Section 54 is now renumbered as Section 82 of the Income Tax Act, 2025.

From April 1, 2026, Tax Year 2026-2027 has started and this means the Income Tax Act, 2025 is applicable and this means you need to familiarise yourself with the newly renumbered Sections to keep your financial plans on track. Previously, under the Income Tax Act, 1961, Section 54 was a well-known term especially for those involved in buying or selling property.

The reason is Section 54 allows you to claim an income tax exemption on the selling a property if you reinvested the long term capital gains from the old property to buy a a new residential property in India.

Section 54 is now renumbered as Section 82 of the Income Tax Act, 2025.

According to Chartered Accountant Suresh Surana, under Section 82 of the Income-tax Act, 2025, if a taxpayer has long-term capital gains (LTCG) from the sale of a residential property, those gains are exempt from tax as long as they are reinvested in acquiring another residential house property in India.

* It applies where an individual or HUF earns long-term capital gains from the sale of a residential house property (i.e., a building or land appurtenant thereto, chargeable under the head Income from house property).

* To claim exemption, the taxpayer must reinvest the capital gains in a new residential house property situated in India, within the prescribed timelines:

* Purchase of a new house property within one year before or two years after the date of transfer or

* Construction of a new house property within three years from the date of transfer.It is also important to note that the exemption is limited to the cost of the new asset. If the capital gains exceed the cost, the excess amount will be taxable. However, if the capital gains are equal to or less than the cost of the new asset, the entire gains shall be exempt.

Also, the benefits under Section 82 are subject to a monetary limit, with the maximum amount of capital gains eligible for exemption capped at Rs 10 crore. Any capital gains exceeding this limit will be taxable according to applicable provisions.

Here's a table showing the capital gain tax rate:

Capital assetHolding period for long-term classificationShort-term capital-gains rateLong-term capital-gains rateLand or building or bothMore than 24 monthsNormal slab rate12.5% without indexation*Physical gold and jewelleryMore than 24 monthsNormal slab rate12.5% without indexationDigital gold representing underlying physical goldMore than 24 monthsNormal slab rate12.5% without indexationGold ETF listed on a recognised stock exchangeMore than 12 monthsNormal slab rate12.5% without indexationListed equity shares, Equity Oriented Mutual Funds and Units of a Business Trust on which STT is applicableMore than 12 months20% under section 111A12.5% under section 112A on aggregate gains exceeding Rs. 1.25 lakhUnlisted equity sharesMore than 24 monthsNormal slab rate12.5% without indexationSpecified mutual fund** units acquired on or after 1 April 2023Not applicable; gains always qualify as short-term under section 50AANormal slab rate, irrespective of holding periodNot applicableDebt mutual fund units acquired before 1 April 2023More than 12 months if listed; more than 24 months if unlistedNormal slab rate12.5% without indexationOther mutual funds that do not qualify as equity-oriented or specified debt fundsMore than 12 months if listed; more than 24 months if unlistedNormal slab rate12.5% without indexationListed bonds and debenturesMore than 12 monthsNormal slab rate12.5% without indexationUnlisted bonds and debenturesNot applicable; gains always qualify as short-term under section 50AANormal slab rate, irrespective of holding periodNot applicableMarket-linked debenturesNot applicable; gains always qualify as short-term under section 50AANormal slab rate, irrespective of holding periodNot applicableSource:

CA Suresh Surana

Surana says that Section 82 of the Income Tax Act, 2025 highlights certain important points that are relevant from a tax planning and compliance standpoint. Some of the key points are outlined below -

* One time option to invest in two residential houses: Where the capital gains do not exceed Rs 2 crore, the taxpayer has the option to invest in two residential houses in India instead of one. However, this option can be exercised only once in a lifetime.

* Lock-in period and withdrawal of exemption: If the new property is transferred within 3 years, the earlier exemption is effectively withdrawn through adjustment in the cost of acquisition, leading to higher taxable capital gains.

* Capital Gains Account Scheme (CGAS): If the capital gains are not fully utilised before the due date of filing the return of income under Section 263(1) of the Income Tax Act, 2025 (corresponding to section 139(1) of Income Tax Act, 1961), the unutilised amount must be deposited in a notified CGAS with a specified bank or institution.Such deposit is deemed to be used for the purpose of claiming exemption, subject to actual utilisation within the prescribed period.

Surana says: "Any unutilised amount after the expiry of 3 years becomes taxable in the year in which such period lapses."