India, Dec. 20 -- Riya Ghosh, 32, inherited a flat from her father in 2022, which he had originally bought in 2005 for Rs.25 lakh. She sold the property in 2025 for Rs.1.2 crore. Under the amended law, she now has to compute her long-term capital gains in two ways and pay tax on the lower amount. In the first method, she applies the 12.5% tax rate on the difference between the sale price and the original cost. This gives her a taxable gain of Rs.95 lakh, and a tax liability of Rs.11.87 lakh.

In the second method, she applies the 20% rate after adjusting the purchase cost for indexation. As this is an inherited property, the 'date of purchase' is not the year she inherited it but the year her father bought it. So the indexation starts fro...