New Delhi: A lot of taxpayers believe that once the financial year ends, they’ve missed their chance to save on taxes. But that’s not entirely true. According to tax platform TaxBuddy, with the right planning even after the year ends, you can still make smart moves to reduce your tax burden. A little awareness and timely action can go a long way in keeping more money in your pocket.
If you sell a property in India within two years of buying it, the profit is treated as short-term capital gains (STCG). These gains are added to your total income and taxed according to your regular income tax slab rate. Also, keep in mind that no indexation benefit (adjusting for inflation) is available for short-term gains. So, early sales can mean a higher tax bill.
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If you sell a property after holding it for more than two years, the profit is considered long-term capital gains (LTCG). As per current rules, LTCG on immovable property is taxed at 12.5 per cent without indexation benefits. However, there’s good news—individuals and Hindu Undivided Families (HUFs) can claim tax exemptions under Section 54 and Section 54F if they reinvest the gains in a residential property. This can significantly reduce or even eliminate your tax liability.
Ramesh, a homeowner from Hyderabad, sold his house in May 2024 and made a long-term capital gain of Rs 50 lakh. He assumed he would have to pay over Rs 10 lakh in taxes when filing his return, which is due by September 15, 2025. However, he hadn’t yet found a suitable property to reinvest the gains. That’s when he discovered the Capital Gains Account Scheme (CGAS) — a helpful, government-backed option for those looking to claim tax exemption under Section 54 or 54F, even if they haven’t reinvested the money before the ITR deadline.
Sections 54 and 54F of the Income Tax Act offer tax exemption if capital gains from selling a property are reinvested in a new residential home. But if you haven’t found the right property before the ITR filing deadline, there’s still a way to keep the exemption. By depositing the unspent capital gains into the Capital Gains Account Scheme (CGAS), it’s treated as if you’ve already reinvested. This gives you more time to buy or build a house—without losing your tax benefit.
By using the Capital Gains Account Scheme, Ramesh was able to save Rs 10.40 lakh in taxes. He also gained valuable time—up to 2 years to buy a new property or 3 years to construct one—without losing his tax exemption. His ITR was filed on time, keeping him fully compliant with tax laws, and the exemption was secured. Most importantly, this approach gave him the flexibility to avoid rushing into a costly or poorly planned purchase.
For anyone with capital gains, September 15, 2025, is more than just the ITR filing deadline—it’s also the final opportunity to secure tax exemption if you haven’t reinvested the gains yet. Ramesh’s story is a perfect example of how smart planning can help avoid rushed decisions. By using the right tools like CGAS, taxpayers can legally save lakhs in taxes and get more time to make thoughtful investment choices.
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