Do you intend to sell your home? Here's why it makes financial sense to schedule it after April 1

By Bricksnwall | 2025-03-24

You have a full year to make tax-saving investing plans if you sell your property after April 1st because the capital gain is taxed in the subsequent fiscal year.

Be sure to hold off on selling your house until April 1, 2025. The capital gains tax deferment is the main benefit. You will have a full year to plan your tax-saving investments if you sell the property after April 1st, as the capital gain will be taxed in the subsequent fiscal year..

For instance, the capital gain from the sale of your home on March 30, 2025, will be subject to taxation in FY 2024–2025. However, the tax liability will move to FY 2025–2026 if you sell it on April 1, 2025.

Furthermore, if you sell after April 1, you can pay the whole tax amount by March 31, 2025, or submit the advance tax in four installments beginning June 15, 2025.

The deadline for putting sale proceeds into a Capital Gains Account Scheme account would also be moved from July 31, 2025, to July 31, 2026, according to experts. This would give you an additional year to determine how to handle the proceeds from the sale.

The capital gains tax deferment is the main benefit. You have a whole year to make tax-saving investment plans if you sell the property after April 1st, as the capital gain is taxed in the subsequent fiscal year. For example, the capital gain on the sale of your home on March 30, 2025, will be subject to taxation in FY 2024–2025. The tax duty, however, moves to FY 2025–2026 if you sell it on April 1, 2025, according to Rahul Singh, senior manager and tax and business advisor at Taxmann.

Better Control of Cash Flow

 "Delaying the sale of your property until the first week of April will help you manage your cash flow and take care of the taxes associated with the transaction," says Abhishek Kumar, a registered investment advisor (RIA) with the Securities and Exchange Board of India (Sebi) and the founder and chief investment advisor of the financial planning company SahajMoney.

 Additionally, you will be required to pay advance tax if the sale of your property results in substantial tax obligations.

"Instead of paying the full tax amount by March 31, 2025, you can submit the advance tax in four installments beginning June 15, 2025, if you sell your property after April 1st," explains Kumar. This will assist in managing cash flow.

Benefits of the Capital Gain Account Scheme (CGAS)

Capital gains are the result of selling a property. The CGAS program permits taxpayers to deposit capital gains from real estate sales if there is no imminent commitment to reinvest the profits. By the deadline, the money needs to be deposited into a CAGS account.

Additionally, rather than July 31, 2025, the deadline for depositing sale profits into a CGAS account would be July 31, 2026. Thus, you have an additional year to determine what to do with the money from the sale," Kumar explains.

To minimise fines for late tax payments, it would be beneficial to move it to the first week of April.

Improved Reinvestment Strategy for Capital Gains

There are ways to reduce capital gains taxes when selling real estate. If you sell a residential property and use the proceeds to buy or build another residential property, you may be subject to Section 54 of the Income Tax Act.

A residential home shall be bought by the individual selling the property either a year before to the sale date or two years following the sale or transfer. In the event that the seller is building a home, he has a longer window of time and must finish the project within three years of the sale or transfer date.

Section 54EC offers an alternative if you choose not to reinvest the capital gains earnings into residential real estate. Certain bonds allow you to invest in capital gains. These bonds are issued by the Rural Electrification Corporation or the National Highways Authority of India.

After the sale, the investment must be completed within six months. These bonds have a five-year lock-in period during which they are not redeemable. So. You will have more time to arrange your taxes and hire professionals if you sell your property in the upcoming fiscal year.

Source: Hindustan Times