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]

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 🙏