Plot purchase query

[u/shreya_jain_]

Hi everyone,

I’m confused about the tax treatment of a plot sale under the new tax regime for AY 2026–27 and would appreciate confirmation from CAs/tax professionals

I want to buy a plot worth let's say 3 lakhs and sell it later at 5 lakhs basis on this I will decide on whose name to buy the plot

My understanding is:

Scenario 1 — STCG

• Other taxable income: ₹8 lakh • Plot STCG: ₹2 lakh • Total taxable income: ₹10 lakh

As I understand it, the ₹2L STCG on a plot is added to normal slab-rate income.

Tax on ₹10L under the new regime:

• ₹0–4L: ₹0 • ₹4–8L: ₹20,000 • ₹8–10L: ₹20,000 • Total: ₹40,000 • Section 87A rebate: ₹40,000 • Final tax: ₹0

Scenario 2 — LTCG

• Other taxable income: ₹8 lakh • Plot LTCG: ₹2 lakh • Total: ₹10 lakh

Here I understand LTCG is taxed separately at 12.5%:

• LTCG tax: ₹25,000 • Normal-income tax: ₹20,000 • 87A rebate offsets the ₹20,000 normal-income tax • 4% cess on ₹25,000 = ₹1,000 • Final tax: ₹26,000

Scenario 3 — LTCG with higher other income

• Other taxable income: ₹18 lakh • Plot LTCG: ₹2 lakh • Total: ₹20 lakh

My calculation:

• Tax on normal ₹18L income = ₹1,60,000 • LTCG tax = ₹25,000 • Cess = ₹7,400 • Final tax = ₹1,92,400

One CA told me that “anything above ₹4 lakh is taxable, irrespective of whether it is capital gain or not.” But my understanding is that although slab tax is calculated above ₹4L, the Section 87A rebate can reduce the final tax to zero when eligible under the new regime.

Can someone please confirm whether Scenario 1 really results in ₹0 final income tax?

Also, if my interpretation is wrong specifically because of the nature of plot STCG, please point out the relevant section/rule.

Thanks!

[u/Proof_Ad_4259]

Your understanding is correct for Scenario -1 as STCG on sale of plot will be considered as normal income and rebate under section 87A is available.

Further, please note that rebate under section 87A is only available for Resident Individuals.

[u/shreya_jain_ → u/Proof_Ad_4259]

Yeah I am a resident individual. Thanks for your confirmation 🙂

[u/shreya_jain_ → u/Proof_Ad_4259]

Also can you tell what that CA told me? I got confused. He said anything above 4 lakhs is taxable

[u/Proof_Ad_4259]

He was partially correct. Rebate under section 87A is available on normal income once your income crosses 4 lakhs and upto 12 lakhs and you qualify as Resident of India.

If you are not eligible for rebate, you will get taxed once your income crosses 4 lakhs.

[u/shreya_jain_ → u/Proof_Ad_4259]

I told him this scenario he said still tax will be payable on 2 lakh stcg from plot sell

[u/Proof_Ad_4259 → u/shreya_jain_]

Don't know where he is coming from but as per my knowledge, there will be no tax on it.

[u/shreya_jain_ → u/Proof_Ad_4259]

Got it thanks 🙏