How indexation can cut your capital gains tax by nearly Rs 38,000

A resident individual selling a house acquired on or before July 2024 can choose between old 20% tax with indexation or new 12.5% tax without indexation.

Indexation adjusts the purchase price for inflation, reducing the taxable capital gain.

Using indexation could cut capital gains tax by nearly Rs 38,000 in a typical example.

The choice depends on the holding period and inflation rate during ownership.