How to calculate Capital Gains tax on the sale of land and building using the myITreturn portal?

If you have sold a house, flat, plot of land, commercial property or another building, the transaction may result in a taxable capital gain or capital loss.

Calculating property capital gains is not always as simple as deducting the original purchase price from the sale price. The calculation may also involve the period for which the property was held, transfer expenses, cost of improvement, stamp-duty value and eligible capital-gains exemptions.

myITreturn provides a Land & Building Calculator that can help you estimate the capital gain or loss arising from a property sale. You can access the calculator from the Important Tools section of myITreturn.com without first signing in.

Before you use the Land & Building Calculator

Keep the relevant property details ready before starting. Depending on your transaction, these may include:

• Date of purchase or acquisition
• Date of sale or transfer
• Original purchase price
• Sale consideration
• Stamp-duty value, where applicable
• Brokerage or commission paid on sale
• Legal or other eligible transfer expenses
• Cost of eligible improvements made to the property
• Your ownership percentage, if the property was jointly owned
• Details of any capital-gains exemption you intend to claim

Keeping the purchase deed, sale deed and supporting expense documents available will make it easier to verify the calculation before filing your Income Tax Return.

Step 1: Visit myITreturn.com and open Important Tools

Visit myITreturn.com .

Go to the Important Tools section and select:

Land & Building Calculator

The calculator can be used to estimate the capital-gains implications of a property sale without first signing in to your myITreturn account.

Step 2: Enter the property transaction details

Enter the required information in the Land & Building Calculator.

Depending on the transaction and calculator fields displayed, carefully enter the relevant details of the property purchase and sale.

Pay particular attention to:

• Purchase or acquisition date
• Sale or transfer date
• Purchase cost
• Sale consideration
• Eligible transfer expenses
• Cost of improvement, where applicable

After entering the required information, click the Calculate button.

The calculator will use the information entered to determine the capital gain or loss based on the applicable computation.

Step 3: Review the Capital Gains Summary

After clicking Calculate, review the result displayed by the calculator.

The summary may help you understand:

• Whether the property results in a short-term or long-term capital gain
• The cost considered for calculation
• Sale consideration considered
• Eligible expenses entered
• Capital gain or capital loss
• Estimated tax implications, where displayed

Review the figures carefully against your property documents before using them for Income Tax Return filing.

Is your property Short-Term or Long-Term?

For transfers during FY 2025-26, land or building is generally classified based on how long the property was held.

For example, if a flat was purchased in January 2023 and sold in August 2025, it was held for more than 24 months and would generally qualify as a long-term capital asset.

How is Capital Gain on property calculated?

The broad calculation is:

Sale consideration / deemed sale consideration
Less: Eligible expenditure incurred in connection with transfer
Less: Cost of acquisition
Less: Eligible cost of improvement
= Capital Gain or Capital Loss 

The final taxable capital gain may then be reduced by eligible exemptions, subject to the applicable conditions.

Example

This is a simplified illustration. The actual taxable capital gain may differ because of stamp-duty valuation, applicable indexation or grandfathering provisions, exemptions and other statutory rules.

Important rule for property sold on or after 23 July 2024

The taxation of long-term capital gains changed significantly for transfers made on or after 23 July 2024.

Long-term capital gains on land or building transferred on or after this date are generally taxed at 12.5% without indexation, subject to applicable surcharge, cess and statutory conditions.

Property acquired before 23 July 2024 by a resident individual or HUF

Special protection applies in certain cases where a resident individual or resident HUF sells land or building acquired before 23 July 2024.

Broadly, the tax calculated using the new 12.5% without indexation method is compared with the tax that would have arisen under the earlier 20% with indexation method.

Where the tax under the new method exceeds the tax under the old method, the excess may be ignored in accordance with the applicable statutory provision.

Stamp-duty value can affect the calculation

The sale consideration mentioned in the agreement is not always the amount ultimately considered for capital-gains purposes.

Where the stamp-duty value of land or building exceeds the declared sale consideration, the deemed-consideration provisions may become applicable.

For FY 2025-26, this is principally governed by Section 50C of the Income-tax Act, 1961.

Therefore, keep the stamp-duty valuation available and do not calculate your capital gain solely from the amount received from the buyer where Section 50C may apply.

Capital-gains exemptions may reduce taxable gains

The gain calculated by the Land & Building Calculator may not necessarily be your final taxable capital gain.

Depending on the nature of the property and the manner in which the sale proceeds or capital gains are reinvested, exemption may be available under provisions such as:

• Section 54 – Certain capital gains from sale of a residential house
• Section 54B – Certain gains arising from transfer of agricultural land
• Section 54EC – Investment of eligible capital gains in specified bonds
• Section 54F – Certain gains arising from transfer of a long-term capital asset other than a residential house

Each exemption has separate eligibility conditions, investment requirements and prescribed time limits.

Do not claim an exemption merely because an investment was made after selling the property. Confirm that all conditions of the relevant section are satisfied.

Jointly owned property

If the property was jointly owned, capital gains generally need to be considered according to the taxpayer's ownership share and the legal facts of the transaction.

For example, if you own a 50% share in a property, do not automatically report 100% of:

• Sale consideration
• Purchase cost
• Improvement expenses
• Transfer expenses
• Capital gain

Use the applicable ownership share unless the filing screen specifically asks for the complete property value and ownership percentage separately.

Does every sale of land result in Capital Gains?

No. Not every piece of land is necessarily a capital asset for income-tax purposes.

For example, certain rural agricultural land in India may fall outside the definition of a capital asset if the prescribed statutory conditions are satisfied.

Similarly, where property is held as stock-in-trade by a taxpayer engaged in the business of dealing in real estate, the income may require business-income treatment instead of ordinary capital-gains treatment.

Therefore, first confirm that the property sold qualifies as a capital asset before relying on a capital-gains calculation.

Documents to keep for property Capital Gains

Retain the following documents, wherever applicable:

1. Purchase deed, allotment letter or acquisition documents
2. Sale deed or transfer agreement
3. Stamp-duty valuation details
4. Proof of purchase price
5. Brokerage and commission receipts
6. Legal and documentation expense receipts
7. Invoices for eligible cost of improvement
8. Proof of ownership percentage in jointly owned property
9. Buyer details and PAN, where required
10. Form 26AS and AIS reflecting the property transaction or related TDS
11. Evidence supporting any exemption claimed
12. Details of investments made under Sections 54, 54EC, 54F or other applicable provisions
13. Capital Gains Account Scheme details, where relevant

Common mistakes to avoid

1. Using only sale price minus purchase price

Capital-gains computation may also involve transfer expenses, improvement costs, deemed sale consideration and other statutory adjustments.

2. Ignoring the 24-month holding period

For land or building, the period of holding determines whether the gain is short-term or long-term.

3. Automatically applying indexation

For transfers on or after 23 July 2024, indexation is no longer generally available. Special grandfathering protection may apply to qualifying property acquired before 23 July 2024 by resident individuals or HUFs.

4. Ignoring stamp-duty value

Section 50C may affect the sale consideration used for capital-gains purposes.

5. Entering the outstanding home-loan balance as purchase cost

The outstanding loan amount is not the same as the property's cost of acquisition.

6. Claiming unsupported renovation expenses

Only eligible cost of improvement should be considered. Keep invoices, payment records and other supporting evidence.

7. Entering the full transaction for jointly owned property

Ensure that the correct ownership percentage and corresponding amounts are considered.

8. Assuming buyer TDS is the final tax on property sale

TDS deducted by the buyer does not determine the final capital-gains liability and does not remove the requirement to report the transaction in the ITR where reporting is required.

9. Treating the calculator result as the final ITR computation

The calculator provides an estimate of property capital gains. Your final ITR computation should also consider exemptions, TDS, other income, losses, applicable tax rates and other relevant provisions.

How to report the property sale in myITreturn

Once you have reviewed the calculation and are ready to file your return, log in to myITreturn and open the relevant Income Tax Return.

The filing flow is generally:

Income → Other Income → Capital Gain [Land and Building] → Add Capital Gain Details 

Enter each property transaction separately and provide the applicable purchase, sale, stamp-duty value, expense, ownership and exemption details.

After saving the transaction, review the detailed capital-gain computation before completing your return.

Income-tax Act, 2025 – Which law applies?

The applicable legislation depends on when the income arises.

Accordingly, property income arising during FY 2025-26 continues to be governed by the Income-tax Act, 1961.

Property transfers taking place from 1 April 2026 onwards fall under the Income-tax Act, 2025 for the relevant Tax Year.

Conclusion

The myITreturn Land & Building Calculator provides a convenient way to estimate capital gains or losses from the sale of a house, flat, plot, land or other property.

However, property capital-gains taxation can involve more than the basic calculation. Before filing your return, verify the property's holding period, purchase and sale values, stamp-duty value, eligible expenses, ownership percentage, applicable indexation or grandfathering treatment and any capital-gains exemption being claimed.

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