Capital Gains Tax on Sale

1. Capital Gains Tax on Sale of House Property vs. Land

Criteria	House Property (Building & Land)	Vacant Land (Plot of Land)
Holding Period for LTCG	More than 24 months (Long-Term)	More than 24 months (Long-Term)
Holding Period for STCG	≤ 24 months (Short-Term)	≤ 24 months (Short-Term)
STCG Tax Rate	As per Slab Rate	As per Slab Rate
LTCG Tax Rate	20% with Indexation	20% with Indexation
Indexation Benefit	✅ Available	✅ Available
Exemptions Available	Section 54 (Reinvestment in house) & Section 54EC (Bonds)	Only Section 54F (Reinvestment in house) & Section 54EC (Bonds)

House Property: Eligible for Section 54, allowing reinvestment in another residential house to save tax.
Land: Not eligible for Section 54. Only Section 54F applies, which requires reinvesting the entire sale proceeds into a house (not just capital gains).

2. Income Tax on Rental Income from House vs. Land

If the asset is not sold but earns income, the tax treatment is different.

Criteria	House Property (Rented Out)	Vacant Land (Leased for Rent/Income)
Taxable Under	Income from House Property (Section 22-24)	Income from Other Sources (Section 56)
Standard Deduction	30% of Net Annual Value	❌ No Standard Deduction
Interest Deduction on Loan	✅ Allowed (up to ₹2 lakh for Self-Occupied, Unlimited for Let-Out)	❌ Not Allowed
Depreciation (If Business Asset)	✅ Allowed	✅ Allowed

House property rental income gets a 30% standard deduction, but land rental does not.
Interest on a home loan for a house is deductible, but interest on a loan for land is not deductible under house property income.

If house property or land is gifted or inherited, tax treatment is different.

Criteria	House Property	Land
Tax on Gift Received	No tax if received from relatives	No tax if received from relatives
Tax on Sale After Inheritance	Capital Gains apply (cost of previous owner considered)	Capital Gains apply (cost of previous owner considered)

Disclaimer : Prepared for Education Purpose