India Real Estate Dictionary

A

3 terms

Affordable Residential Apartment (GST)

Tax & Duties

Also called: GST Affordable Housing

For GST, a residential apartment qualifies as affordable if its carpet area is up to 60 square metres in notified metropolitan cities, or 90 square metres elsewhere, and its value is up to ₹45 lakh. Such flats attract a lower effective GST rate.

Legal basis: GST rate notifications under the CGST Act, 2017; check the latest notification before quoting rates.

Example & agent tip

Example: A 2 BHK of 85 square metres carpet area priced at ₹44 lakh in a non-metro city meets the area and price limits, but one at ₹46 lakh does not.

Agent tip: Both limits must be met. A flat that is cheap but too large, or small but too costly, loses the lower rate.

Annual Rental Value (ARV) Method

Tax & Duties

Also called: ARV System

A way to calculate property tax based on the yearly rent the property could earn. The municipality applies a rate to this value, after deductions, to arrive at the tax bill.

Example & agent tip

Example: A municipality assesses a shop in an old market by estimating the rent it should fetch, then applies the tax rate on that figure.

Agent tip: When a bill looks too high, ask how the rental value was determined and whether rent control or old records were applied.

Arrears and Unrealised Rent

Tax & Duties

Also called: Unrealised Rent Recovered

Rent that was due earlier but was received late, or that was unpaid and recovered later. When received, it is taxed in the year of receipt, with a deduction of 30% allowed on it, whether or not the property is still owned.

Legal basis: Section 25A of the Income-tax Act, 1961 (renumbered in the 2025 Act).

Example & agent tip

Example: A landlord recovers six months of unpaid rent after a court case two years later, and pays tax on it in the year he receives it.

Agent tip: Keep court orders and rent records. They are the evidence that the rent was truly unrealised.

C

9 terms

Capital Gains

Tax & Duties

The profit on sale of a property, equal to sale price minus the cost of acquisition, improvement and expenses of transfer. It is taxed as short-term or long-term depending on how long the property was held.

Legal basis: Income-tax Act, 1961 for transfers up to 31 March 2026, and the Income-tax Act, 2025 from 1 April 2026.

Example & agent tip

Example: A plot bought for ₹40 lakh and sold for ₹70 lakh after four years leaves a long-term capital gain before costs.

Agent tip: Do not give tax advice. Explain the concepts and refer clients to a chartered accountant.

Capital Gains Account Scheme

Tax & Duties

A special bank account in which a seller can deposit unused capital gains before the tax return due date, to claim exemption under Sections 54 and 54F while a new house is purchased or built.

Example & agent tip

Example: A seller deposits ₹40 lakh in the scheme because the new flat is not ready before the return is due.

Agent tip: Unused money not spent in the time allowed becomes taxable.

Capital Gains in Joint Development

Tax & Duties

Also called: Section 45(5A), JDA Capital Gains

A tax rule for landowners who give land to a developer under a joint development agreement for a share of built flats. For individuals and HUFs, the gain is generally taxed in the year the completion certificate is issued, not when the agreement is signed.

Legal basis: Section 45(5A) of the Income-tax Act, 1961; the 2025 Act continues it under a new number.

Example & agent tip

Example: Landowner Gulzar signs a development agreement in 2023, and tax on his capital gain falls in the year the developer gets the completion certificate.

Agent tip: Check the conditions in the section with a CA before signing, since not every JDA qualifies.

Capital Loss Set-off

Tax & Duties

Also called: Set-off and Carry Forward of Capital Loss

The rule for using a loss from selling an asset against capital gains. A long-term loss can be set off only against long-term gains, a short-term loss against any capital gains, and unused losses can be carried forward for eight years if the return was filed on time.

Example & agent tip

Example: Imran sells a plot at a long-term loss and then sells another at a long-term gain in the same year, so he can reduce the gain by the loss.

Agent tip: Tell clients to file the return on time. Late filing can lose the right to carry the loss forward.

Capital Value System

Tax & Duties

Also called: Capital Value Based Property Tax

A way to calculate property tax based on the market value or capital value of the property, using the ready reckoner rate and applying a tax rate. Mumbai's municipal corporation moved to this system in 2010.

Example & agent tip

Example: A flat owner in Mumbai pays property tax calculated from the reckoner rate, the area, the age of the building and the use.

Agent tip: When the ready reckoner rate rises, property tax can rise as well. Check the annual rate update.

Circle Rate

Tax & Duties

Also called: Guideline Value, Collector Rate

The minimum value per unit area fixed by the state government for property in an area, used to calculate stamp duty. Other names are guideline value, guidance value, collector rate, ready reckoner rate and jantri.

Example & agent tip

Example: A flat sells for ₹70 lakh, but the circle rate value is ₹85 lakh. Stamp duty may be charged on the higher figure in states that follow the circle rate.

Agent tip: Check the circle rate before negotiating. Registering below it can lead to extra duty and a tax issue in the buyer's hands.

Cost Inflation Index (CII)

Tax & Duties

Also called: CII

A yearly number published by the government to adjust the purchase cost of an asset for inflation. The base year is 2001-02, set at 100. Indexation using it is now limited, mainly to certain property bought before 23 July 2024 by resident individuals and HUFs.

Legal basis: Notified by the Central Government under the Income-tax Act; indexation for land and buildings was restricted by the Finance (No. 2) Act, 2024.

Example & agent tip

Example: A plot valued at ₹10 lakh on 1 April 2001 is indexed by the ratio of the sale-year index to 100. With the index at 363 for 2024-25, the indexed cost is ₹36.3 lakh.

Agent tip: Tell sellers of old property to compare tax both ways, with indexation at the higher rate and without it at the lower rate, and pick the lower tax where the law permits.

Cost of Acquisition

Tax & Duties

Also called: Purchase Cost, Cost Price

The price paid for a property plus related costs such as stamp duty and registration, used to compute the capital gain on sale. For inherited or gifted property, the previous owner's cost is generally used.

Legal basis: Sections 48 and 49 of the Income-tax Act, 1961 deal with computation and the cost of property received by gift or inheritance; the 2025 Act renumbers them.

Example & agent tip

Example: Ashok bought a Panchkula plot for ₹30 lakh and paid ₹2 lakh in stamp duty and registration, so his cost base is ₹32 lakh.

Agent tip: Ask clients to keep the old sale deed, payment receipts and stamp duty proofs, since these prove cost.

Cost of Improvement

Tax & Duties

Also called: Capital Improvement Cost

The money spent on adding to or improving a property after buying it, such as building an extra floor or major structural work. It can be added to the cost when calculating capital gains. Routine repairs and maintenance do not count.

Example & agent tip

Example: Naveen spends ₹12 lakh adding a floor to his house, and adds that to his cost before computing the gain on a later sale.

Agent tip: Keep bills, contractor invoices and bank payment records. Without proof the deduction may be refused.

D

3 terms

Deemed Let-Out Property

Tax & Duties

Also called: Notional Rent

A second or third self-occupied house that is treated as rented for tax purposes, even if no rent is received. Up to two houses can be treated as self-occupied, and any more are taxed on an assumed rent.

Legal basis: Income-tax Act, 1961, as amended by the Finance Act, 2019; continued in the 2025 Act.

Example & agent tip

Example: Sanjay owns three flats in Mohali. He lives in one, keeps another vacant, and rents none. The third is taxed on a notional rent.

Agent tip: Clients with several homes should ask a CA which two to treat as self-occupied.

Deficit Stamp Duty

Tax & Duties

Also called: Insufficient Stamp Duty, Short Stamping

The shortfall when a document has been stamped with less duty than the law requires. The authority can impound the document and demand the balance with a penalty, and an insufficiently stamped document may not be used as evidence until the deficit is paid.

Legal basis: Sections 33 and 35 of the Indian Stamp Act, 1899, and the corresponding state laws.

Example & agent tip

Example: A sale deed is stamped on ₹50 lakh, but the circle rate value is ₹65 lakh. The sub-registrar asks for the difference and a penalty before registering.

Agent tip: Check the circle rate value before the deed is drawn. Paying the right duty first costs less than fixing it later.

Double Taxation Avoidance Agreement (DTAA)

Tax & Duties

Also called: DTAA, Tax Treaty

A treaty between India and another country that prevents the same income from being fully taxed in both. It sets which country may tax which income and allows a credit for tax paid abroad. The tax residency certificate is needed to claim it.

Example & agent tip

Example: An NRI in Canada sells a flat in India and pays tax here, then claims credit for it when filing his tax return in Canada under the treaty.

Agent tip: NRIs should ask their CA about the treaty with their country of residence before signing a sale agreement.

F

4 terms

Fair Market Value as on 1 April 2001

Tax & Duties

Also called: FMV 2001

For property bought before 1 April 2001, the seller may use its fair market value on that date as the cost, if that is higher than the actual cost. It cannot exceed the stamp duty value on that date.

Example & agent tip

Example: Satwant's family house was built in 1985 for a few thousand rupees. On sale he uses a registered valuer's report of its 2001 value as his starting cost.

Agent tip: Get a valuer's report for 1 April 2001 and keep records. Old property without proof of cost can produce a large taxable gain.

Form 16B

Tax & Duties

Also called: TDS Certificate for Property

The TDS certificate that a buyer must give the seller after depositing tax deducted on a property purchase. The buyer downloads it from the tax portal, and the seller needs it to claim credit for the tax.

Example & agent tip

Example: Seller Vimla asks her buyer for Form 16B so the 1% already paid shows in her tax records.

Agent tip: Remind buyers to download and hand over the certificate promptly, because sellers need it when filing their return.

Form 26QB

Tax & Duties

Also called: 26QB

The statement-cum-challan that a buyer files to deposit tax deducted at source when buying a property worth the threshold amount or more. The buyer files it online and pays the tax, without needing a TAN.

Legal basis: Linked to the TDS on immovable property purchases under Section 194-IA of the Income-tax Act, 1961; the 2025 Act renumbers this.

Example & agent tip

Example: Rohit pays a seller ₹80 lakh for a flat and deducts 1% as tax, then pays it using Form 26QB with both parties' PAN.

Agent tip: The buyer must file within 30 days after the end of the month of deduction. Missing the deadline attracts a fee and interest.

Full Value of Consideration

Tax & Duties

Also called: Sale Consideration

The total amount received or receivable for transferring a property, which is the starting point to compute capital gains. If the sale price is lower than the stamp duty value, the stamp duty value may be treated as the consideration.

Legal basis: Section 48 of the Income-tax Act, 1961 and the stamp duty value rule in Section 50C (Section 78 of the 2025 Act).

Example & agent tip

Example: A seller in Mohali sells at ₹90 lakh, while the stamp duty value is ₹1.1 crore, so the tax computation may use a figure above the price actually paid.

Agent tip: Always compare the agreed price with the stamp duty value before signing. The gap can create tax for both sides.

G

5 terms

GST on Maintenance Charges

Tax & Duties

Also called: GST on Society Maintenance

GST that applies to monthly maintenance charged by an RWA or housing society to its members when charges exceed the exemption limit per member per month. Within the limit, the charges are exempt. Above it, the whole amount can be taxed.

Legal basis: Notifications under the CGST Act, 2017; the limit has been revised before, so check the current one.

Example & agent tip

Example: A society in Mohali charges ₹9,000 a month per flat, which crosses the exempt limit and attracts GST on the whole amount.

Agent tip: Residents should ask the committee about the exemption rule and registration status before disputing the bill.

GST on Real Estate

Tax & Duties

Also called: GST on Property, GST on Flats

Goods and services tax on property sales. Under-construction residential units attract an effective 5% (1% for affordable housing) without input tax credit, with a standard land deduction already built into the rate. A sale made after the completion certificate or first occupation attracts no GST only if the whole price is received after that date. Instalments paid earlier remain taxable.

Legal basis: GST rates for real estate were set in 2019 and unchanged for builders after the September 2025 rate reforms. Check current notifications.

Example & agent tip

Example: A buyer of an under-construction ₹80 lakh flat pays 5% GST. For a ready flat bought entirely after the completion certificate, no GST is charged, but instalments paid before it are taxable.

Agent tip: Ask for the GST break-up on the cost sheet, and confirm whether the project is ready or under construction.

GST on Rent

Tax & Duties

GST on renting commercial property is 18%. Renting a residential property to a registered person is taxed at 18% under reverse charge from 18 July 2022, while rent for personal residence is not taxed. Since 10 October 2024, a registered tenant paying rent for non-residential property to an unregistered landlord also pays under reverse charge.

Example & agent tip

Example: A company renting a flat for staff housing pays GST under reverse charge.

Agent tip: Commercial landlords above the turnover threshold must register. Check the rule for each client.

GST on Under-Construction vs Ready Property

Tax & Duties

Also called: GST on Ready-to-Move Flat

GST applies to the sale of a flat while it is under construction, but not once the completion or occupancy certificate has been issued before the sale. A buyer purchasing a completed flat does not pay GST on it.

Example & agent tip

Example: Ritu buys a flat in a project that already has its occupancy certificate, so there is no GST in her bill, while her friend booking in the same tower earlier paid GST.

Agent tip: Check the date of the completion certificate. It can decide whether your client pays GST at all.

Guidance Value

Tax & Duties

The name for the state-fixed minimum property value in Karnataka, used to calculate stamp duty and registration fee.

Example & agent tip

Example: A Bengaluru plot is registered at a price that must not be lower than the guidance value of that area.

Agent tip: Use the Kaveri portal or the sub-registrar to confirm the current value.

Related: Circle Rate Stamp Duty

H

3 terms

Holding Period

Tax & Duties

Also called: Period of Holding

The time between acquiring a property and selling it, used to decide whether a gain is short-term or long-term for income tax. For land and buildings, it must exceed 24 months for the gain to count as long-term.

Legal basis: Long-term status for immovable property depends on a holding of more than 24 months under the Income-tax Act; the 2025 Act carries this rule forward.

Example & agent tip

Example: Poonam books a flat in March 2023 and sells the allotment in April 2025, a gap of more than 24 months, so the gain is long-term.

Agent tip: Confirm with a chartered accountant the date from which the period counts, such as allotment or agreement. A few days can change the tax.

Home Loan Interest Deduction

Tax & Duties

Also called: Section 24(b)

Under the old tax regime, interest on a home loan can be deducted up to ₹2 lakh a year for a self-occupied house. For a let-out house there is no cap on the interest, but set-off of the loss against other income is limited to ₹2 lakh. The new regime does not allow the self-occupied deduction.

Legal basis: Section 24(b) of the Income-tax Act, 1961. The Income-tax Act, 2025 applies from 1 April 2026 with new section numbers.

Example & agent tip

Example: A salaried buyer in the old regime claims ₹2 lakh of interest on a self-occupied flat.

Agent tip: The better regime depends on the client's other deductions. A chartered accountant can compare.

Home Loan Principal Deduction

Tax & Duties

Also called: Section 80C

Under the old regime, repayment of principal on a home loan, and stamp duty and registration fee paid, can be deducted within the overall ₹1.5 lakh limit of Section 80C.

Legal basis: Section 80C of the Income-tax Act, 1961 (now Section 123 of the Income-tax Act, 2025). Stamp duty and registration fee count only in the year they are paid.

Example & agent tip

Example: A buyer's principal repayment and stamp duty together use up the ₹1.5 lakh limit.

Agent tip: Mention that the limit is shared with other investments such as PPF.

I

4 terms

Impounding of Documents

Tax & Duties

Also called: Impounding of Instrument

The power of an authorised officer to take custody of a document that appears to be insufficiently stamped or unstamped. The document is held until the proper duty and any penalty are paid.

Legal basis: Section 33 of the Indian Stamp Act, 1899, and state stamp laws.

Example & agent tip

Example: A court notices an agreement for sale with too little stamp duty and sends it to the collector, who impounds it until the deficit is paid.

Agent tip: Pay the right stamp duty at the start. An impounded document can delay a sale or a court case.

Income from House Property

Tax & Duties

A head of income that taxes the annual value of a property, mainly rent. The owner gets a 30% standard deduction on net annual value and can claim home loan interest, subject to limits.

Example & agent tip

Example: A landlord earns ₹3 lakh in rent a year. After municipal taxes, he claims a 30% deduction on the net value.

Agent tip: Explain that self-occupied property has different treatment from rented property.

Indexation

Tax & Duties

Adjusting the purchase cost of an asset for inflation using the Cost Inflation Index, so that tax is levied only on the real gain. For property it now applies only under the optional 20% route for resident individuals and HUFs on property acquired before 23 July 2024.

Example & agent tip

Example: A flat bought in 2012 has its cost raised by the index figures before the gain is calculated.

Agent tip: Ask when the client bought the property. Date of purchase decides whether the indexation option exists.

Input Tax Credit (ITC)

Tax & Duties

A credit for GST paid on inputs, set against GST payable on outputs. Builders of residential projects at the standard 5% and 1% rates cannot claim ITC on those sales.

Example & agent tip

Example: A builder who has opted for the 5% rate cannot adjust GST paid on cement and services against its liability.

Agent tip: When a builder says "GST without ITC", it means the lower rate is charged and the builder bears the cost of inputs.

Related: GST on Real Estate

J

2 terms

Jantri

Tax & Duties

The name for the state-fixed minimum property value in Gujarat, used to compute stamp duty.

Example & agent tip

Example: A buyer in Ahmedabad pays stamp duty on the higher of the jantri value and the sale price.

Agent tip: Check the latest jantri for the survey number and zone.

Related: Circle Rate Stamp Duty

Joint Home Loan Tax Benefit

Tax & Duties

Also called: Co-Owner Tax Benefit

When two or more people buy a house and are co-borrowers, each may claim home loan deductions separately, based on their share in the property and the EMI they actually pay. Each claims within the usual limits.

Example & agent tip

Example: Husband and wife in Zirakpur are joint owners and co-borrowers, so each claims the interest deduction on their own share in the same year.

Agent tip: The co-borrower must also be a co-owner and must actually repay the loan. Keep the bank statements that show it.

L

3 terms

Land Value Deduction (GST)

Tax & Duties

Also called: One-Third Land Deduction

A rule for GST on under-construction flats where one-third of the total price is treated as land value and left out of GST. The effective rates for residential projects already take this into account, so buyers see just the final rate.

Legal basis: Notified under the CGST Act, 2017 through the real estate rate notifications; check the current notification.

Example & agent tip

Example: On a ₹60 lakh under-construction flat, the builder's invoice shows GST at the effective rate on the full price, not an extra rate on land.

Agent tip: Do not let a builder add GST on top of a quoted all-inclusive effective rate. Ask for a clear bill.

Long-Term Capital Gains

Tax & Duties

Also called: LTCG

Gain on sale of land or a building held for more than 24 months. For transfers on or after 23 July 2024 the rate is 12.5% without indexation. Resident individuals and HUFs may choose 20% with indexation for property acquired before 23 July 2024.

Example & agent tip

Example: A resident who bought a flat in 2015 and sells it in 2026 can compare 12.5% without indexation with 20% with indexation, and choose the lower tax.

Agent tip: The choice can change the tax by lakhs. Always refer the client to a tax professional with the purchase year in hand.

Lower Deduction Certificate

Tax & Duties

Also called: Section 197 Certificate, Nil TDS Certificate

A certificate from the tax department allowing a payer to deduct tax at a lower rate, or nil, than normally required. A property seller applies for it when the tax on gains will be far lower than the standard deduction rate on the full sale price.

Legal basis: Section 197 of the Income-tax Act, 1961, applied through Form 13; the 2025 Act renumbers it.

Example & agent tip

Example: An NRI selling a flat at a small gain applies for a lower deduction certificate, so the buyer deducts tax on the gain and not on the whole price.

Agent tip: Apply well before the sale closes. Without the certificate, the buyer must deduct at the standard rate.

N

2 terms

Net Annual Value (NAV)

Tax & Duties

Also called: NAV

The income from a let-out house for tax purposes, found from the higher of the expected rent and the actual rent, less municipal taxes paid by the owner. From NAV, the 30% standard deduction and home loan interest are deducted.

Legal basis: Section 23 of the Income-tax Act, 1961 (renumbered in the 2025 Act).

Example & agent tip

Example: A landlord in Chandigarh earns ₹4 lakh in rent, pays ₹20,000 in municipal tax, and so starts with a net annual value of ₹3.8 lakh.

Agent tip: Keep municipal tax receipts. Only taxes the owner actually paid in the year reduce the value.

NRE and NRO Accounts

Tax & Duties

Also called: NRE Account, NRO Account

Bank accounts for NRIs. An NRE account holds money earned abroad and can be sent back freely, while an NRO account holds income earned in India, such as rent, and is subject to limits and tax on transfer abroad.

Legal basis: Governed by the Foreign Exchange Management Act, 1999 and RBI rules.

Example & agent tip

Example: A Singapore-based owner of a Panchkula flat has the rent credited to an NRO account and uses an NRE account to pay the home loan EMI from foreign earnings.

Agent tip: Rent from Indian property goes into an NRO account. Plan repatriation with documents early.

P

3 terms

Pre-Construction Interest

Tax & Duties

Also called: Pre-Possession Interest

Interest paid on a home loan before the house is completed or possession is taken. It cannot be claimed at once. It is added up and claimed in five equal yearly instalments starting from the year of completion, within the overall interest limit.

Legal basis: Section 24(b) of the Income-tax Act, 1961; the 2025 Act renumbers it.

Example & agent tip

Example: Kirti pays interest for three years before her builder hands over a Zirakpur flat, and claims the total over five equal years after possession.

Agent tip: Tell buyers of under-construction flats to keep every interest certificate, including those for years before possession.

Property Tax

Tax & Duties

A yearly tax on property owners collected by the municipal body, based on size, use, location and age of the property.

Example & agent tip

Example: A flat owner pays property tax to the municipal corporation each year, with a rebate for early payment.

Agent tip: Ask the seller for the latest property tax receipt. Arrears pass to the new owner in practice.

Property Tax Self-Assessment

Tax & Duties

Also called: Self-Assessment of Property Tax, SAS

A system in which owners calculate and declare their own property tax using the municipality's formula, then pay it. The authority may later check the figures and demand extra tax with penalty if the declaration was wrong.

Example & agent tip

Example: Under the self-assessment scheme, Pritam enters his plot area, built-up area and use on the municipal portal and pays the tax it calculates.

Agent tip: Keep the receipt. It is useful evidence of ownership and of an updated municipal record when you sell.

R

6 terms

Ready Reckoner Rate

Tax & Duties

The name for the government's minimum property rates in Maharashtra, published each year and used to compute stamp duty.

Example & agent tip

Example: A buyer in Pune checks the annual ready reckoner for the zone and floor before agreeing a price.

Agent tip: Ready reckoner rates vary by zone, use and age of building. Use the official tables.

Related: Circle Rate Stamp Duty

Registration Fee

Tax & Duties

A fee paid to the registration department when a document is registered. It is separate from stamp duty and is usually a small percentage of the value, sometimes with a cap.

Legal basis: Registration Act, 1908, and state fee schedules.

Example & agent tip

Example: In some states the registration fee is about 1% of the property value, while others fix a maximum amount.

Agent tip: Budget stamp duty and registration fee together. Together they add several percent to the cost of a purchase.

Repatriation of Sale Proceeds

Tax & Duties

Also called: Repatriation of Property Sale Money

Sending money from the sale of an Indian property abroad. An NRI generally must pay tax first and meet limits set under FEMA, with a limit of one million US dollars a year from NRO funds, and file Forms 15CA and 15CB.

Legal basis: Foreign Exchange Management Act, 1999 and RBI rules; check the current limits.

Example & agent tip

Example: After selling his Mohali flat and paying tax, Ajay gets a chartered accountant's certificate before sending the balance to his foreign account.

Agent tip: Tell NRI sellers to obtain tax clearance, Form 15CA and Form 15CB documents before the sale completes.

Residential Status (Income Tax)

Tax & Duties

Also called: Tax Residency, Resident vs Non-Resident

A person's tax status for the year, as resident, resident but not ordinarily resident, or non-resident. It depends on the number of days spent in India and decides whether income earned abroad is taxed in India. It differs from the FEMA definition of NRI.

Legal basis: Section 6 of the Income-tax Act, 1961; the 2025 Act has a corresponding provision.

Example & agent tip

Example: Prakash spends 130 days in India this year and a long time abroad earlier, and his accountant checks which stay test applies before his tax return.

Agent tip: NRI sellers should have residency worked out by a CA before a sale, since it decides the tax and the deduction at source.

Reverse Charge on Real Estate

Tax & Duties

Also called: RCM in Real Estate

A GST rule under which the buyer, not the seller, pays the tax. It applies to a promoter who buys less than the required share of inputs from registered suppliers, and to certain land or development rights supplied by landowners under joint development.

Legal basis: Notified under Section 9(3) and 9(4) of the CGST Act, 2017 and related notifications.

Example & agent tip

Example: A builder in Zirakpur buys too much material from unregistered dealers, so he pays GST himself on the shortfall under reverse charge.

Agent tip: Ask a GST consultant about reverse charge when structuring a joint development with a landowner.

Rural Agricultural Land

Tax & Duties

Also called: Rural Agricultural Land (Capital Asset Exemption)

Farmland that falls outside specified distances from a municipality or cantonment, depending on its population. For income tax it is not a capital asset, so its sale does not give rise to capital gains tax.

Legal basis: Section 2(14) of the Income-tax Act, 1961, which the 2025 Act continues under a new number.

Example & agent tip

Example: Sukhdev sells farmland in a village far beyond the notified distance from the town, and does not pay capital gains tax on the sale.

Agent tip: Distance is measured as the law prescribes, so confirm with an accountant before telling a seller the gain is free of tax.

S

12 terms

Section 54 Exemption

Tax & Duties

Also called: Section 54, Section 82

An exemption from long-term capital gains when the gain from a residential house is invested in another residential house within the time allowed: one year before or two years after the sale for purchase, or three years for construction. The cost of the new asset counted is capped at ₹10 crore.

Legal basis: Section 54 of the Income-tax Act, 1961, now Section 82 of the Income-tax Act, 2025.

Example & agent tip

Example: Mr. Bedi sells his old flat and buys a new one within a year. He may claim the exemption on the capital gain invested.

Agent tip: Explain timelines and the ₹10 crore cap, and send clients to a tax adviser for details.

Section 54B Exemption

Tax & Duties

Also called: Agricultural Land Reinvestment Exemption

A capital gains exemption for farmers who sell agricultural land that they, or their parents, used for farming, and buy other agricultural land within the allowed time. The unused money must be placed in the Capital Gains Account Scheme before the return deadline.

Legal basis: Section 54B of the Income-tax Act, 1961; the 2025 Act carries it under a new number.

Example & agent tip

Example: Baldev sells his two acres near Banur for development and buys another farm within the permitted period, so the gain is exempt to the extent reinvested.

Agent tip: Confirm that the land qualified as a capital asset and was actually farmed. Keep proof of agricultural use.

Section 54EC Bonds

Tax & Duties

Also called: 54EC Bonds, Capital Gain Bonds

Long-term capital gains from land or building can be exempted by investing the gain in specified bonds within six months, with a five-year lock-in. The limit is ₹50 lakh across the financial year of sale and the next financial year.

Legal basis: Section 54EC of the Income-tax Act, 1961, now Section 85 of the Income-tax Act, 2025. The list of eligible bonds is set by law and notification and can change.

Example & agent tip

Example: A seller invests ₹50 lakh of gain in eligible bonds within six months of the sale to claim the exemption.

Agent tip: Confirm the current list of eligible bonds before advising on this route.

Section 54F Exemption

Tax & Duties

An exemption from long-term capital gains on assets other than a residential house, such as land, when the sale proceeds are invested in a residential house. The exemption is proportionate to the amount invested, subject to conditions.

Legal basis: Section 54F of the Income-tax Act, 1961, now Section 86 of the Income-tax Act, 2025.

Example & agent tip

Example: A plot is sold and the net sale proceeds are used to buy a new flat. The gain may be exempt in proportion to the money invested.

Agent tip: The conditions on owning other houses matter. Refer the client to a chartered accountant.

Section 56(2)(x) Difference Tax

Tax & Duties

A tax rule under which a buyer who gets property for less than its stamp duty value is taxed on the difference above a limit, as income from other sources.

Legal basis: Section 56(2)(x) of the Income-tax Act, 1961, carried into the Income-tax Act, 2025 with a new section number.

Example & agent tip

Example: A buyer registers a flat for ₹1 crore, while the stamp duty value is ₹1.3 crore. The gap of ₹30 lakh passes the tolerance for buyers (higher of ₹50,000 or 10% of the price), so the whole ₹30 lakh can be taxed in his hands as income.

Agent tip: Explain how undervaluing a deed can create tax risk for the buyer.

Related: Stamp Duty Value Circle Rate

Short-Term Capital Gains

Tax & Duties

Also called: STCG

Gain on sale of land or a building held for 24 months or less. It is added to income and taxed at the person's slab rate.

Example & agent tip

Example: A flat sold within 18 months of purchase gives a short-term gain taxed at the owner's slab rate.

Agent tip: Warn short-term investors that the tax is higher than on long-term gains.

Stamp Duty

Tax & Duties

A state tax on property documents, paid when a sale deed, gift deed, lease or similar instrument is executed. The rate depends on the state, the type of property and sometimes the buyer's gender, age or relation to the seller.

Legal basis: The Indian Stamp Act, 1899 or the state's own stamp Act, such as the Maharashtra Stamp Act, 1958. Rates are set by state governments.

Example & agent tip

Example: A buyer of a ₹60 lakh flat in a state with 6% stamp duty pays ₹3.6 lakh as stamp duty, plus the registration fee.

Agent tip: Give clients the current stamp duty slab for the state, and tell them to check concessions for women or for first-time buyers.

Stamp Duty Concession for Women

Tax & Duties

Also called: Women's Stamp Duty Rebate

A reduction in stamp duty that some states give when a property is registered in the name of a woman, either alone or jointly. The amount of concession and the conditions differ by state and can change.

Example & agent tip

Example: Because the flat is registered in the name of the wife, the family in a state with a concession pays a lower stamp duty than it would if the husband alone were the buyer.

Agent tip: Check the current rule of the state before advising on whose name the property should be in, and do not choose a name only for the saving.

Stamp Duty Deduction (Section 80C)

Tax & Duties

Also called: Section 80C Stamp Duty Benefit

A deduction under the old tax regime for stamp duty, registration fee and transfer costs paid in buying a residential property, claimed in the year of payment. It forms part of the overall Section 80C limit shared with other savings.

Legal basis: Section 80C of the Income-tax Act, 1961; available only if the old regime is chosen, and renumbered in the 2025 Act.

Example & agent tip

Example: Trisha pays ₹3 lakh in stamp duty and registration in the year of purchase, and claims up to the Section 80C limit under the old regime.

Agent tip: Compare the old and new regimes before claiming. The new regime does not allow this deduction.

Stamp Duty Refund

Tax & Duties

Also called: Refund of Stamp Duty

Money returned by the state when stamp paper is not used or a document is cancelled within the time and under the conditions fixed by the state. A refund is not automatic and is often subject to a deduction.

Example & agent tip

Example: Neeraj buys stamp paper for a sale deed, but the deal falls through. He applies to the stamp authority within the allowed time to get the money back.

Agent tip: Check the deadline in the state's rules. Refunds are usually denied if the claim is late.

Stamp Duty Value

Tax & Duties

The value adopted by the stamp authority for charging duty on a transfer. It is the circle rate value or the sale price, depending on the state's law. For income tax, it is the value compared with the actual price.

Legal basis: Section 50C (now Section 78 of the Income-tax Act, 2025) for sellers and Section 56(2)(x) for buyers.

Example & agent tip

Example: A plot is sold for ₹1 crore, but the stamp duty value is ₹1.3 crore. If the gap passes the allowed tolerance, the whole difference can be taxed, not just the excess.

Agent tip: Tell clients that a price below the stamp duty value can create tax for both buyer and seller.

Standard Deduction (House Property)

Tax & Duties

A flat 30% deduction from the net annual value of a rented property, allowed for repairs and other costs without proof.

Example & agent tip

Example: With net annual value of ₹2 lakh, the owner deducts ₹60,000 as standard deduction.

Agent tip: Tell landlords this is automatic and not tied to actual repair bills.

T

5 terms

Tax on Gifted Property

Tax & Duties

Also called: Gift of Property Tax

Property received from specified close relatives is not taxed in the receiver's hands. When the receiver later sells it, capital gains are worked out using the original owner's cost and counting the original owner's holding period.

Legal basis: Section 56(2)(x) provides the exemption for relatives, and Sections 49 and 2(42A) of the 1961 Act deal with cost and holding period. The 2025 Act renumbers them.

Example & agent tip

Example: Shobha receives a flat as a gift from her father. When she sells it, her cost is her father's cost and the holding period includes his.

Agent tip: A gift deed needs proper stamping and registration. Keep the donor's purchase records for the future capital gains calculation.

Tax on Inherited Property

Tax & Duties

Also called: Inheritance Tax, Estate Duty

India has no inheritance tax. Receiving property by will or succession is not taxed, but a later sale is. The heir uses the previous owner's cost and holding period to compute capital gains.

Example & agent tip

Example: After her father's death, Usha inherits a Panchkula house under his will and pays no tax on receiving it, only on any gain when she sells.

Agent tip: Collect the previous owner's purchase papers early. They are needed for the cost of acquisition.

TDS on Property Purchase

Tax & Duties

Also called: Section 194-IA, 194IA TDS

A tax deducted by the buyer at 1% when buying immovable property (other than rural agricultural land) if the consideration or the stamp duty value is ₹50 lakh or more. The buyer pays it to the government and gives the seller a certificate. PAN of both parties is required.

Legal basis: Section 194-IA of the Income-tax Act, 1961. The Income-tax Act, 2025 (in force from 1 April 2026) carries the rule into its consolidated TDS provisions, so check the current section and form.

Example & agent tip

Example: A buyer pays ₹80 lakh for a flat. He deducts 1%, or ₹80,000, from the seller's payment and deposits it with the tax department.

Agent tip: Remind buyers to deduct and pay the TDS within the time limit. Late payment attracts interest and fees.

Related: Stamp Duty Value Capital Gains

TDS on Rent

Tax & Duties

Also called: Section 194-IB

Tax deducted by an individual or HUF tenant who pays rent above ₹50,000 per month. The rate is 2% from 1 October 2024.

Legal basis: Section 194-IB of the Income-tax Act, 1961, carried into the consolidated TDS provisions of the Income-tax Act, 2025.

Example & agent tip

Example: A tenant paying ₹70,000 a month deducts 2% on the rent.

Agent tip: Remind tenants and landlords of the TDS rule when they agree on rent.

TDS on Sale by NRI

Tax & Duties

A buyer purchasing property from a non-resident Indian must deduct tax on the seller's gain at the rates applicable to non-residents. The rate depends on the type of gain and the holding period, and the buyer follows a separate process from the 1% TDS.

Legal basis: Section 195 of the Income-tax Act, 1961. Rates and procedures change, so check the current rules.

Example & agent tip

Example: A buyer in Chandigarh buys a flat from an NRI who is moving abroad and must deduct tax at the non-resident rate.

Agent tip: This area is easy to get wrong. Tell clients to take a chartered accountant's help before payment.

U

1 terms

Unit Area Value (UAV) System

Tax & Duties

Also called: UAV System, Unit Area Method

A way to calculate property tax by multiplying the area of the property by a rate per unit area. The rate depends on location, use, age, structure and floor, with multipliers applied. Delhi's municipal corporation and Bengaluru use versions of it.

Example & agent tip

Example: A shopkeeper in Delhi calculates property tax from the covered area, the colony category, the type of use and the age of the building.

Agent tip: Always check the category of the colony and the use factor. A wrong entry can raise the bill.

Affordable Residential Apartment (GST)

Annual Rental Value (ARV) Method

Arrears and Unrealised Rent

Capital Gains

Capital Gains Account Scheme

Capital Gains in Joint Development

Capital Loss Set-off

Capital Value System

Circle Rate

Cost Inflation Index (CII)

Cost of Acquisition

Cost of Improvement

Deemed Let-Out Property

Deficit Stamp Duty

Double Taxation Avoidance Agreement (DTAA)

Fair Market Value as on 1 April 2001

Form 16B

Form 26QB

Full Value of Consideration

GST on Maintenance Charges

GST on Real Estate

GST on Rent

GST on Under-Construction vs Ready Property

Guidance Value

Holding Period

Home Loan Interest Deduction

Home Loan Principal Deduction

Impounding of Documents

Income from House Property

Indexation

Input Tax Credit (ITC)

Jantri

Joint Home Loan Tax Benefit

Land Value Deduction (GST)

Long-Term Capital Gains

Lower Deduction Certificate

Net Annual Value (NAV)

NRE and NRO Accounts

Pre-Construction Interest

Property Tax

Property Tax Self-Assessment

Ready Reckoner Rate

Registration Fee

Repatriation of Sale Proceeds

Residential Status (Income Tax)

Reverse Charge on Real Estate

Rural Agricultural Land

Section 54 Exemption

Section 54B Exemption

Section 54EC Bonds

Section 54F Exemption

Section 56(2)(x) Difference Tax

Short-Term Capital Gains

Stamp Duty

Stamp Duty Concession for Women

Stamp Duty Deduction (Section 80C)

Stamp Duty Refund

Stamp Duty Value

Standard Deduction (House Property)

Tax on Gifted Property

Tax on Inherited Property

TDS on Property Purchase

TDS on Rent

TDS on Sale by NRI

Unit Area Value (UAV) System

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