Planning to sell your property? Here’s why timing it after April 1 makes financial sense

If you’re planning to sell your property, make sure to wait until April 1, 2025. The primary advantage is the deferment of capital gains tax. By selling the property after April 1, the capital gain will be taxed in the following financial year, giving you an entire year to plan your tax-saving investments.

For example, if you sell your property on March 30, 2025, the capital gain will be taxed in FY 2024-25. However, if you sell it on April 1, 2025, the tax liability will shift to FY 2025-26.

Additionally, selling after April 1 allows you to submit the advance tax in four instalments starting June 15, 2025, rather than paying the entire tax amount by March 31, 2025.

Furthermore, experts say the deadline for depositing sale proceeds into a Capital Gains Account Scheme account would be extended to July 31, 2026, instead of July 31, 2025, giving you an extra year to decide how to handle the sale proceeds.

“The primary advantage is the deferment of capital gains tax. By selling the property after April 1, the capital gain is taxed in the following financial year, giving you a full year to plan tax-saving investments. For instance, if you sell your house on March 30, 2025, the capital gain will be taxed in FY 2024-25. However, if you sell it on April 1, 2025, the tax liability shifts to FY 2025-26,” says Rahul Singh, senior manager and tax and corporate advisor, Taxmann.

So, instead of rushing to plan your taxes, you have the luxury of a year to make proper tax planning decisions.

Also Read: Income Tax Bill 2025: New Bill clarifies carry forward of house property losses

Improved Cash Flow Management

“If you are in the process of selling your property, then pushing it to the first week of April would help you manage your cash flow to take care of taxes related to the transaction,” says Abhishek Kumar, a Securities and Exchange Board of India (Sebi) registered investment advisor (RIA) and founder and chief investment advisor of SahajMoney, a financial planning firm.

Also, when you sell a property, if the property sale results in significant tax liabilities, you will have to pay advance tax.

“If you sell your property after 1st April then you can submit the advance tax in four installments starting 15th June 2025 instead of paying the entire tax amount by 31st March 2025,” says Kumar. This will help with cash flow management.

Also Read: Income Tax Bill 2025: Long-Term Capital Gains Tax on property remains unchanged

Capital Gain Account Scheme (CGAS) Benefits

Selling a property results in capital gains. When there is no plan to reinvest the proceeds immediately, the CGAS scheme allows taxpayers to deposit capital gains from property sales. The amount must be deposited in a CAGS account by the deadline.

“Also, the deadline for depositing sale proceeds in a CGAS account would be 31st July 2026 instead of 31st July 2025. So you get an extra year to decide what to do with the sale proceeds,” says Kumar.

So pushing it to the first week of April would help in avoiding penalties for delay in tax payment.

Also Read: Here’s a look at Income Tax changes impacting homebuyers from April 1

Better Capital Gains Reinvestment Strategy

There are certain options for saving capital gains taxes on property sale. Under Section 54 of the Income Tax Act, if you sell a residential property and reinvest the gains into purchasing or constructing another residential property.

The person who sells the property should purchase a residential house either one year before the date of sale or transfer the property two years after the sale or transfer. If the seller is constructing a house, he has an extended time period and has to construct a home within three years of the date of sale/transfer.

If you do not reinvest the capital gains proceeds into residential property, Section 54EC provides an alternate option. You can invest in capital gains in specified bonds. The National Highways Authority of India or Rural Electrification Corporation issues these bonds.

The investment needs to be done within six months of the sale. These bonds have a lock-in period of five years when they cannot be redeemed. Thus. If you sell your property in the new financial year, you will have more time to plan your taxes and add experts.

Anagh Pal is a personal finance expert who writes on real estate, tax, insurance, mutual funds and other topics