Capital Gains Tax When You Sell Property in Bhiwadi: What You Actually Owe

Most sellers in Bhiwadi budget for brokerage, think about the registry, and discover the tax question only after the deal is agreed. By then the choices that would have reduced the bill, or at least made it predictable, have already been made.

India replaced the Income-tax Act, 1961 with the Income-tax Act, 2025, in force from 1 April 2026. Section numbers changed with it, so this guide uses the current numbering and puts the older, more familiar number in brackets where it helps. If your accountant quotes you a 1961 section, both of you are probably describing the same rule.

This guide sets out how a property sale is taxed in India, written for the situations we see in this belt: a plot bought in a Tapukara or Tijara township years ago, a resale flat on Alwar Bypass Road, an inherited parcel with a jamabandi that has not been touched in a decade, and the NRI owner selling from abroad. Every figure below cites the section it comes from, because tax rates change with each Finance Act and a number without a source is worth nothing to you.

This is not tax advice for your specific return. It is what the law says, so you can ask your chartered accountant the right questions instead of finding out at the end.

The first thing to fix: you are taxed on the gain, not the sale price

Capital gains tax applies to your gain, not to the sale price. It is charged on what is left after you subtract what the property cost you and what the sale cost you. A surprising number of sellers assume otherwise.

In plain terms:

Sale consideration, minus the cost of acquisition, minus the cost of improvement, minus the expenses of transfer, equals your capital gain.

Each of those subtractions is real money you can prove:

• Cost of acquisition is what you paid, as recorded in your own registered sale deed. This is the first reason under-declaring a purchase price hurts the person who does it: a lower registered value on the way in becomes a larger taxable gain on the way out. Our guide on why three different values attach to one sale works through that arithmetic.
• Cost of improvement is capital work on the property, not maintenance. Building a boundary wall on a plot, adding a room, a registered addition to the structure. Repainting and repairs are not improvement.
• Expenses of transfer are the costs of selling: brokerage you actually paid, legal and documentation charges, and similar. Keep the receipts, because an expense you cannot evidence is an expense you cannot claim.

For an inherited property, the cost of acquisition is what the previous owner paid, and the holding period includes the period they held it. That matters a great deal on the old khatedari parcels in this belt, where a family may have held land for decades.

Short-term or long-term: the 24-month line

Immovable property held for more than 24 months is long-term. At 24 months or less the gain is short-term and is added to your income at your slab rate. The rate you pay turns on nothing else.

Immovable property, meaning land and buildings, became long-term at 24 months rather than 36. Count from the date of acquisition to the date of transfer. For inherited property, as noted, the previous owner’s holding period counts towards yours.

The practical consequence for a Bhiwadi plot investor is worth stating plainly: selling inside two years puts the whole gain into your slab, which for anyone in the higher brackets is a materially worse outcome than the long-term rate. If a sale is close to the line, the date matters.

The long-term rate, and the option that applies to older purchases

Long-term gains on immovable property are charged at 12.5 per cent without indexation, and a resident individual or HUF who bought before 23 July 2024 may instead compute at 20 per cent with indexation where that treatment is available to them. The Finance (No. 2) Act 2024 made both changes at once:

1. The long-term rate on immovable property became 12.5 per cent, without the benefit of indexation.
2. Grandfathering relief was retained in a narrower form. For qualifying resident individual and HUF cases involving land or a building acquired before 23 July 2024, computing at 20 per cent with indexation may remain the better outcome. It is not a choice every seller has, so treat it as something to test rather than assume.

Surcharge and cess apply on top of whichever rate is used.

For a seller in this belt who bought a plot in a Tapukara township in 2018, the question is whether the grandfathered computation is available on those facts, and if it is, which of the two produces the smaller bill. Indexation tends to help where the gain was modest against inflation; the flat 12.5 per cent tends to help where the property multiplied.

Have your CA establish whether the relief applies to you, then run both. This is a test against your specific facts rather than a rule of thumb, and it is the single calculation most worth doing before you sign.

The relief is framed around resident individual and HUF cases. A non-resident seller does not get the indexation route, which is one of several reasons the NRI position is heavier. That is covered below.

The stamp-value rule: why the DLC rate can decide your taxable gain

Where your stated consideration is below the stamp duty value, the stamp-value rule at section 78 of the Income-tax Act, 2025 (the former section 50C) deems the stamp duty value to be your sale consideration for computing the gain. In Rajasthan that stamp duty value is the DLC rate, which is why this catches Bhiwadi sellers specifically.

A 10 per cent tolerance applies, so a stamp duty value up to 110 per cent of your declared consideration falls inside the band and the declared figure stands. Beyond that, the principle is fixed: sell far enough below the circle rate and the department computes your gain as though you had sold at it. The tolerance has been 10 per cent since 1 April 2021.

Two consequences follow, and sellers routinely discover both too late:

• A genuinely soft sale still gets taxed at the DLC value. In pockets where the notified rate has not kept pace downward with a slow market, a seller who accepted a real, arm’s-length price below the DLC value can face tax on a gain larger than the one they actually made.
• There is no advantage in under-declaring. Writing a smaller number in the deed does not shrink your gain once you fall outside the tolerance, because the stamp-value rule substitutes the DLC value anyway. It only strips you of legal proof of what you received.

Look up the notified rate for your colony before you agree a price, on our Bhiwadi DLC rate table. If your negotiated price is drifting below it, that is a conversation to have with your CA before signature rather than after.

TDS: what the buyer deducts, and why it is not your tax bill

The one per cent the buyer deducts is an advance against your tax, not the tax itself. Capital gains tax and TDS are two different things, and conflating them is the most common confusion on a seller’s side of a Bhiwadi deal.

When the seller is a resident, the property-purchase TDS provision applies: section 393 of the Income-tax Act, 2025 (the former section 194-IA). Where the statutory threshold of fifty lakh rupees is met, the buyer deducts one per cent and deposits it using Form 26QB, then gives the seller a TDS certificate. The buyer does not need a TAN.

Read that threshold carefully, because it is widely misdescribed. The one per cent is not charged only on the slice above fifty lakh. Once the threshold conditions are met, the deduction is computed under the provision and its valuation rules on the consideration, not on the excess.

The deduction is not your tax. It is an advance against it. Your actual liability is the capital gains computation above, and the TDS already deducted is credited against it when you file. If your real liability is lower than what was deducted, the difference comes back as a refund; if it is higher, you pay the balance.

Two practical points for the seller:

• Give the buyer your PAN, correctly. A deduction made against a wrong or missing PAN is deducted at a higher rate and is painful to reclaim.
• Collect the certificate. You need it to claim the credit. Sellers who never chase it end up paying the same tax twice and arguing for the refund later.

When the seller is an NRI, that provision does not apply and the rules for payments to non-residents (the former section 195) govern instead. This is a different animal and it is covered next.

Selling as an NRI

When the seller is an NRI the buyer deducts under the rules for payments to non-residents, at capital gains rates on the gross consideration rather than the resident one per cent. There is no single flat rate to quote. The remedy is a lower deduction certificate applied for before the sale.

The buyer must deduct at the capital gains rate, plus applicable surcharge and cess, and the default position is that the deduction is computed on the whole sale consideration rather than on your gain. The applicable rate depends on the holding period and your own position, so no single figure can be quoted here. On a property that has appreciated modestly, that can mean an enormous amount of your money sitting with the department while you wait to reclaim it.

The remedy exists and is routinely under-used: apply to the Assessing Officer for a lower or nil deduction certificate, which authorises the buyer to deduct against your actual computed gain rather than the gross price. Apply early, because it takes time and the buyer cannot act on it until it is issued.

Other points that differ for a non-resident seller:

• The buyer needs a TAN for a non-resident deduction and files Form 27Q, not Form 26QB. Many resident buyers do not know this, and the delay lands on your timeline.
• The indexation grandfathering option does not apply to non-residents.
• Repatriating the proceeds has its own limits and paperwork, including Form 15CA and a chartered accountant’s Form 15CB. Our NRI guide to buying property in Bhiwadi covers the funding and repatriation side.
• A Double Taxation Avoidance Agreement may let you set Indian tax against your liability where you live, but the relief has to be claimed correctly.

The three exemptions worth knowing before you sign

One relief covers a residential house sold and replaced, another covers any other asset such as a plot reinvested in a house, and a third covers specified bonds. All three are time-bound, which is why they belong in your planning before the sale.

Residential house replacement, at section 82 of the Income-tax Act, 2025 (the former section 54), applies when you sell a residential house and buy or build another. The replacement must be purchased within one year before or two years after the sale, or constructed within three years.

Reinvestment of another long-term asset (the former section 54F) applies when you sell something other than a residential house, which for our sellers usually means a plot, and invest the net consideration in a residential house. The conditions are stricter: it works on the net sale consideration rather than just the gain, and it is unavailable if you already own more than one other residential house on the date of transfer. This is the section most relevant to a plot seller in the Tapukara or Tijara belt.

Specified bonds, at section 85 (the former section 54EC), apply to long-term gains on land or buildings reinvested within six months of the transfer, subject to a fifty lakh rupee ceiling and a five-year lock-in. The lock-in is five years, not the three years older material still quotes.

Where the reinvestment will not be completed before your return is due, the Capital Gains Account Scheme lets you park the amount in a designated bank account and preserve the exemption while you complete the purchase or construction.

Get the conditions and current limits confirmed by your CA against your own dates. The timing windows are the part people breach, usually by assuming the clock runs from the agreement rather than from the transfer.

What to keep on file, from the day you buy

Keep the registered deed, the payment trail, the improvement bills and the brokerage invoice, because an expense you cannot evidence is an expense you cannot claim. Almost every seller who overpays does so because one of these cannot be produced.

• Your registered sale deed with the consideration stated, the primary evidence of your cost of acquisition
• Proof of every payment, through banking channels, on both the purchase and the sale
• Bills for capital improvements, with the contractor’s details, not a bundle of loose receipts
• The brokerage invoice and any legal or documentation charges on the sale
• The TDS certificate from your buyer
• For inherited property, the previous owner’s purchase deed, because their cost and their holding period become yours
• Your jamabandi and mutation record, which our guide to what a jamabandi does and does not prove explains

How this fits with the rest of your sale

The tax computation sits at the end of the sequence but is decided at the start. The price you register, the date you transfer, and whether the consideration clears the DLC value all feed straight into the gain.

• How to sell a property in Bhiwadi covers pricing, the file, and the negotiation
• Bhiwadi DLC rate table gives the notified rate for your colony
• Registry charges in Bhiwadi covers the stamp duty and registration fee on the buyer’s side
• Asking versus negotiated versus registered value explains why the registered number follows you into this calculation

Frequently Asked Questions

Do I pay capital gains tax on the full sale price?

No. You are taxed on the gain, which is the sale consideration minus your cost of acquisition, minus capital improvements, minus the expenses of transfer such as brokerage. A property that sold for ₹60 lakh and cost ₹45 lakh with ₹2 lakh of documented improvement and ₹60,000 of brokerage produces a gain far smaller than the ₹60 lakh received.

How long must I hold property in India for long-term treatment?

More than 24 months for immovable property. At 24 months or less the gain is short-term and is added to your income at your slab rate, which is usually the worse outcome. Where you inherited the property, the previous owner’s holding period counts towards yours.

Is the one per cent TDS my capital gains tax?

No, and this is the most common confusion. The one per cent deducted by the buyer under the property-purchase provision, section 393 of the Income-tax Act, 2025 and formerly section 194-IA, is an advance against your liability rather than the liability itself. It is also not charged only on the amount above fifty lakh: once the threshold conditions are met the deduction is computed on the consideration under the provision. Your actual tax is the capital gains computation, and the TDS is credited against it when you file. Collect the certificate from your buyer, or you cannot claim the credit.

What happens if I sell below the DLC rate?

Under the stamp-value rule at section 78 (formerly section 50C), where the stated consideration is less than the stamp duty value, the stamp duty value is deemed to be your sale consideration for computing the gain. A 10 per cent tolerance applies, so a stamp duty value up to 110 per cent of your declared price stays within the band. So selling under the circle rate does not reduce your capital gains, and under-declaring the deed value achieves nothing except leaving you without proof of what you were actually paid.

How can I reduce capital gains tax on a plot sale?

For a plot, the relevant route is reinvestment of the net sale consideration in a residential house within the prescribed window (the former section 54F), subject to not already owning more than one other residential house. Specified bonds under section 85 (the former section 54EC) are the alternative: within six months, up to fifty lakh, with a five-year lock-in. Both are time-bound, so plan them before the sale rather than after, and have your CA confirm the current conditions against your dates.

Is TDS different when the seller is an NRI?

Yes, substantially. The rules for payments to non-residents apply instead of the resident property-purchase provision, the deduction is at capital gains rates plus surcharge and cess rather than a flat one per cent, and it is computed on the gross consideration by default. There is no single rate to quote, because it depends on the holding period and the seller’s position. An NRI seller should apply for a lower or nil deduction certificate well before the sale, or a large part of the sale proceeds will sit with the department pending a refund.

Do I pay tax on inherited property when I receive it?

Inheritance itself is not a transfer that triggers capital gains. The tax arises when you sell. At that point your cost of acquisition is what the previous owner paid, and their holding period counts towards yours, which usually means the sale is long-term even if you received the property recently.

Sources Checked

• Income-tax Act, 2025, in force from 1 April 2026, which replaced the Income-tax Act, 1961. Current provisions used above: section 393 (property-purchase TDS, formerly 194-IA), section 78 (stamp-value substitution, formerly 50C), section 82 (residential house replacement, formerly 54) and section 85 (specified bonds, formerly 54EC). The Income Tax Department publishes a section comparison utility between the two Acts
• Finance (No. 2) Act 2024, for the 12.5 per cent long-term rate on immovable property and the grandfathering reference date of 23 July 2024
• Income Tax Department capital gains guidance, and the department page for section 393 (checked August 2026)
• The 10 per cent stamp-value tolerance has applied since 1 April 2021; the five-year bond lock-in applies to qualifying bonds issued on or after 1 April 2018
• ePanjiyan: for the stamp duty value the rule applies, which in Rajasthan is the DLC rate (checked August 2026)

Tax law changes, and section numbering changed wholesale on 1 April 2026. Confirm every figure above against the current Act with a chartered accountant before acting on it.

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