Selling a flat with furniture? Learn how taxes, capital gains, and stamp duty apply when you sell a furnished property.
Saloni Kumari | Aug 29, 2025 |
Selling a Flat with Furniture? Here’s What You Need to Know About Taxes and Stamp Duty
It is usually simpler to calculate capital gains tax when you sell a flat; you subtract what you paid for the flat (after adjusting for inflation and improvements) from the amount you sold it for. However, when you sell property along with furniture, fixtures, or appliances, the property does not remain just an immovable property. Furniture and other immovable property are taxed differently under the Income Tax Act. This can affect how your total tax is calculated.
A flat is an immovable property or real asset; the profit earned on its sale is called capital gains, either short-term or long-term, depending on how long you owned it. However, on the other hand, furniture is movable property. If it is for personal use (like your own sofa or bed), the profit from selling it is usually not taxed. However, if the furniture was part of a rental business (for instance, if you rented the flat fully furnished), then selling it might be taxed as business income or capital gains, depending on the situation.
You must make a clear sale agreement if you are selling your flat along with furniture. The agreement must clearly show the value of the flat and furniture separately. This technique will prevent you from paying unnecessary stamp duty on the value of movable property, i.e., furniture. Also, it will help clear your tax situation and avoid confusion or mistakes. If you don’t separate the values, the entire amount may be taxed as a property sale, and you might end up paying more in taxes and duties.
Stamp duty is imposed on the transfer of immovable property, not on movable assets such as furniture. So, if you list the furniture’s value separately in the sale agreement, you only pay stamp duty on the flat’s price. This can save you a lot of money, especially on expensive flats. However, always make sure the values are genuine. If you overstate or understate the value of the furniture, it could raise red flags with the tax department or the registrar.
Below are a few suggested tips for forming good documentation and valuation:
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