How to file ITR if you have sold house or land in FY 2024-25

The deadline to file an income tax return (ITR) for FY 2024-25 (AY 2025-26) is September 15, 2025 for individuals who are not liable for income tax audit. This means if you had sold any land or house property in FY 2024-25, you must disclose the capital gains income (if any earned from such a sale) in the ITR.

One of the most common ways to save income tax on capital gains income earned from selling a residential house property or land is to reinvest those gains into another property or land. This is covered under Section 54 and 54F of the tax law. There are seven other sections as well, but the requirement for those are different.

If you're selling a long-term residential property and want to take advantage of the benefits under Section 54/54F, make sure to choose the right Income Tax return form that fits your income sources. But more of that later. First understand how you can save on capital gains by using Section 54 and 54F.

Section 54 of the Income-tax Act, 1961 provides exemption from long-term capital gains where the gains arose from the transfer of a residential house property (being buildings or lands appurtenant thereto) and the assessee, being an individual or Hindu Undivided Family (HUF), invested such gains in the purchase or construction of another residential house in India.

Section 54F of the Income-tax Act, 1961 grants an exemption from long-term capital gains where the gains arose from the transfer of any long-term capital asset other than a residential house property, provided the assessee, being an individual or Hindu Undivided Family (HUF), invested the net consideration in the purchase or construction of a residential house in India.

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What does Section 54 say for AY 2025-26 (FY 2024-25)?

Chartered Accountant (Dr.) Suresh Surana says that Section 54 provides relief from capital gains tax for individuals and Hindu Undivided Families (HUFs) on the sale of a long-term residential property by allowing exemption if the capital gains are reinvested in purchasing or constructing another residential house in India.

Some of the key provisions includes:

• The taxpayer must purchase the new residential house within 1 year before or 2 years after the date of transfer of the original house or construct it within 3 years after the transfer.
• If the capital gain exceeded the cost of the newly acquired asset, the excess amount would be taxable. On the other hand, if the capital gain was equal to or less than the cost of the new asset, the entire gain would qualify for exemption.
• In cases where the capital gain is not fully used before filing the income tax return, the unutilized amount must be deposited in a specified bank under the CGAS scheme before filing the ITR. This deposited amount is treated as the cost of the new asset.
• The exemption can apply to one residential house or, if the capital gain does not exceed Rs 2 crore, and to two residential houses (option exercisable once in a lifetime).
• If the cost of the new residential asset exceeds Rs 10 crore, the amount exceeding Rs 10 crore will not be considered for exemption under Section 54.
• This limits the benefit of exemption to a maximum of Rs 10 crore of new asset cost. Furthermore, amounts deposited under the specified scheme (when capital gains are not fully utilized) will be deemed as part of the cost of the new asset, but subject to the Rs 10 crore cap and other conditions.

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How to file ITR with property sale capital gains income for FY 2024-25 (AY 2025-26)

When you sell a long-term residential property and want to claim the benefit under Section 54/54F, you need to select the appropriate Income Tax Return (ITR) form based on your income sources. Surana says that the selection of ITR generally depends upon the type of income. Taxpayers who have income from capital gains from transfer of residential house property cannot opt for ITR - 1 and ITR – 4.

He says: "The taxpayer can opt for ITR – 2 or ITR – 3 depending upon the source of income.”

Also read: How to pay zero or lower income tax on your residential property sale using Sections 54 and 54F

Surana says that while filing the ITR, the taxpayer must fill in Schedule CG (Capital Gains) with details of the sale transaction, including the date of transfer, sale consideration, and indexed cost of acquisition and improvement (if applicable) of the original residential property to calculate the long-term capital gain.”

To claim exemption under Section 54, the taxpayer has to furnish certain details such as :

• Date of transfer of original asset,
• Cost of the new residential house purchased or constructed,
• Date on which new residential house was purchased or constructed.
• Date of deposit into Capital Gains Accounts Scheme (CGAS) account, if any
• Amount of deduction claimed

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Sold property and deposited the amount in CGAS account, how to file ITR?

Surana says that when you sell a long-term residential property and do not use the entire capital gain to buy or construct a new property within the statutory time period, then the remaining amount must be deposited into a Capital Gains Account Scheme (CGAS) account or else it will become taxable. This deposit of money into CGAS account needs to be done before the due date of filing ITR.

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Surana says: “The amount already used for purchase or construction, along with the amount deposited in CGAS, will be treated as the cost of the new property for claiming exemption. In the return, the taxpayer must fill in Schedule CG (Capital Gains), where the sale details and capital gains are reported. Specifically, the deposit made in the CGAS account must be reported under point D of Schedule CG in ITR-2 (or the corresponding section in ITR-3). To claim exemption under Section 54, the taxpayer has to furnish certain details such as :

• Date of transfer of original asset,
• Amount deposited in CGAS before due date
• Date of deposit
• Account number
• IFSC code
• Amount of deduction claimed

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Surana says: “If the amount deposited in CGAS is not fully used to buy or construct the new residential property within the specified period (generally 3 years from the date of sale), the unutilized amount becomes taxable in the year when the 3-year period expires.”

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A taxpayer sold his property and claimed Section 54 LTCG exemption for a partial amount. How to pay the tax and file ITR?

When a taxpayer sells a long-term residential property and claims Section 54 exemption on only a part of the capital gains because the cost of the new residential property is lower than the total capital gain, the remaining capital gains amount becomes taxable.

Surana says that while filing the Income Tax Return (ITR), you should select the appropriate form, usually ITR-2 if there is no business income or ITR-3 if business income is present.

He says: “In Schedule CG (Capital Gains) of the ITR, the taxpayer must report the full capital gains from the sale of the property.”

According to Surana, the exemption under Section 54 is equal to the amount invested in the new residential property. Any unutilized portion of LTCG (i.e., LTCG – investment in the new house) remains fully taxable. Such taxable LTCG is subject to tax at the rate of :

• 20% with indexation for any transfer which takes place before 23 July 2024
• 12.5% without indexation for any transfer which takes place on or after 23 July 2024.

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For transfer of asset being land or building or both, which is acquired before 23 July 2024, individual and HUF taxpayers are given the option to pay tax at the lower of the following rates:

• 20% with indexation
• 12.5% without indexation

The tax liability arising on the taxable portion of LTCG must be discharged either through advance tax or by way of self-assessment tax, and the payment should be made before filing the income tax return.

Also read: If you don’t make these 8 disclosures, your ITR may be treated as defective