A resident individual sells a building in January 2026 that was acquired in 2010. While computing the tax on the resulting long-term capital gains, the assessee may pay:

1. For transfers on or after 23.7.2024, LTCG under section 112 is normally taxed at 12.5% without indexation. 2. A special relief applies to a resident individual or HUF transferring land or building or both ACQUIRED BEFORE 23.7.2024. 3. In such cases the tax payable is the LOWER of (a) 12.5% on gains computed without indexation and (b) 20% on gains computed with indexation. 4. The building here was acquired in 2010 (before 23.7.2024) by a resident individual, so the option applies. 5. Crucially, the comparison operates only at the tax-computation stage — gross total income always carries the unindexed gains; and if the indexed computation shows a loss, tax is Nil but that loss can neither be set off nor carried forward. 6. Options A and B each present one leg as mandatory; option C mixes the concessional rate with indexation, a combination the law never offers. _Source: ICAI CA Inter P3(A) Income-tax SM (May 2026), Ch 3 Unit 4 Capital Gains, PDF p. 34_