I had purchased an appartment in 2012 at a cost of Rs 17.5 lakhs. Now in September 2025 I want to sell it at 30 lakhs. How do I apply indexation for calculation of LTCG. What will be the applicable tax. Please guide me. Also how to determine the date of purchase. I got the allotment letter on 6th October 2012, Registration was done on 6th December 2012 and Occupation letter was given on 6th August 2018. I have assumed that the date of registration is the date of purchase.
Hey Alok, hope you’re doing great! Your question took me back to the time when I sold my first flat, and trust me, I was equally confused about indexation and LTCG (Long-Term Capital Gains). Let’s clear this up in simple terms. Since you bought the apartment in 2012, the date of registration (6th December 2012) is generally treated as the date of acquisition for tax purposes. The allotment letter can sometimes be considered (https://itaxsoftware.net), but in most practical cases, especially when the registration date is available, that’s the one the Income Tax Department goes with. Now, when you sell the flat in September 2025 for ₹30 lakhs, you’ll be calculating LTCG by applying indexation on your purchase cost. The Cost Inflation Index (CII) for FY 2012-13 was 200, and for FY 2025-26, it is projected to be around 376 (the government publishes it every year). Your indexed cost becomes: ₹17.5 lakhs × (376 ÷ 200) ≈ ₹32.9 lakhs. Since your sale value is ₹30 lakhs, interestingly, it looks like there’s no LTCG but actually a notional long-term capital loss. That means, technically, you won’t have to pay any tax; instead, you could carry forward the loss for set-off against future capital gains, provided you file your return on time.
I remember when I sold my apartment in Kolkata back in 2019, I almost made the mistake of calculating tax on the raw profit without indexation. A CA friend saved me from overpaying by showing me how indexation worked like a hidden shield. In your case, it’s similar—indexation can sometimes turn what looks like a gain into a paper loss, saving you from taxes. I also recall worrying about which date counted—my allotment letter date or registration. Later, I learned that registration is the safest bet to avoid any disputes. So, Alok, take my advice: maintain all three documents (allotment, registration, and occupation letter) in your records, but use the registration date for your calculations. And if you’re considering reinvesting, sections like 54 or 54F could even give you exemptions in case of gains in the future. Always double-check with a CA before filing, but you’re in a comfortable position here—no tax headache!
Thank you Pranab for your advise. It’s of great help. I have another problem. I just learnt that the the sell price will be taken as the benchmark value set by the Govt. I do not know the BMV. So the LTCG may be different.
Pranab Sir,
This refers to my earlier query regarding sale of my appartment. On 12.09.2025 I finally made an agreement (registered with the Sub Registrar) with a customer to sell the appartment at Rs 30 lakhs. As per the agreement the customer paid Rs 25.5 lakhs to me on the date of agreement and the balance 4.5 lakhs will be paid during registration of Sale Deed.
Registration of sale deed could not be done as the Society has not formed yet owing to legal issues.
I want your advise on filing of ITR. Suppose the Sale Deed registration drags on to FY 2026-27 whether I should file ITR in AY 2026-27 on the basis of the Agreement dt. 12.09 2025 or should I wait for the Registration of Sale Deed till AY 2027-28. How do I account for the 25.5 lakhs I received in FY 2025-26.
To index the sale of an apartment, register the property transaction with the local land or sub-registrar office. This legal process ensures ownership transfer and updates government property records officially.