Should I sell my flat at indexed value

At what price the flat should be sold is totally on your discretion. Normally, the right price of the property can be discovered by the ongoing rate in that area and the negotiation between the buyer and the seller.

The indexation comes into picture only when the sell is complete. Please also note that the indexation cost of the property can be higher or lower than the actual sell cost. Therefore, first try to discover the fair price of the property and also check the indexed value and then complete the sell.

Once the sell is complete, you need to calculate long term capital gains tax by taking into account the indexed value of the property + the cost of improvement + registration cost etc. and accordingly pay taxes (if the sell value is greater than the indexed value). If the sell value is less then or equal to the the indexed value, there is no need to pay any capital gains taxes.

The registration cost / stamp duty etc. of the property is fixed based on the market value of the property available with the Government authorities/ registrar of properties. The Government valuation of the property could be less or more than the actual value of the transaction at which the property was sold.

Thanks for writing to Advisorkhoj.