Should I sell my flat and invest to earn interest, or keep it and earn rent in my retirement?

These are a set of queries raised by ET Wealth readers, which have been answered by our panel of experts.

I own a two-bedroom flat in Bengaluru, which is about 10 years old, and have no outstanding loan. I am a senior citizen with pension income and live with my son. Should I retain the property and earn rental income, or sell it and invest the proceeds in fixed deposits for a steady interest? Currently, my annual income is below Rs 12 lakh, so I am not liable to pay any tax.

Vidya Bala Co-founder, PrimeInvestor.in: Properties can become difficult to manage with age. Maintenance issues, tenant-related concerns, repairs, legal paperwork, and periodic supervision can turn what appears to be a valuable asset into an ongoing responsibility. If you are receiving a regular pension and do not depend on rental income to meet your living expenses, holding on to the property may not be the most efficient option.

Unless your son, as the legal heir, has a strong desire to retain the house, selling it could be a practical decision. The proceeds can then be redeployed in investments that are easier to manage. You could invest in the RBI Floating Rate Bonds if you need the income or invest in any mutual fund.


My apartment was purchased and registered in May 2001 for Rs 30 lakh. The government-guideline value of the property in the area is now around Rs 1 crore, while its current market value is estimated at about Rs 1.65 crore. Could you please explain the capital gains tax implications if I sell the property?

Amit Maheshwari Managing Partner, AKM Global: The sale of a residential property purchased in May 2001 for Rs 30 lakh and proposed to be sold for Rs 1.65 crore will attract Long Term Capital Gains (LTCG) tax. Since the property was acquired before 23 July 2024, a resident individual or HUF can choose between the old 20% tax rate with indexation and the new 12.5% rate without indexation, whichever is more beneficial.
As the sale price exceeds the stamp duty value of Rs 1 crore, the actual sale consideration of Rs 1.65 crore will be used for tax computation. Without indexation, the taxable gain works out to Rs 1.35 crore, resulting in a tax liability of Rs 16.88 lakh (excluding surcharge and cess). With indexation, assuming a Cost Inflation Index (CII) of 376, the indexed cost rises to Rs 1.128 crore, reducing the taxable gain to Rs 52.2 lakh and the tax liability to Rs 10.44 lakh.
Therefore, the 20% tax regime with indexation is the more beneficial option, lowering the tax outgo by about Rs 6.44 lakh. The tax can be further reduced by reinvesting the capital gains in another residential property within the prescribed period or by investing up to Rs 50 lakh in specified capital gains bonds within six months of the sale. The final tax liability may reduce further once the CII for FY 2026–27 is notified.

Our panel of experts will answer questions related to any aspect of personal finance. If you have a query, mail it to us right away. Email ID: etwealth@timesgroup.com