Capital Gain Calculation on sale of Ancestral Property

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  1. Nageshwark

    Nageshwark New Member

    Respected Sir,
    My Father purchased a Plot for Rs.6000/-(Six thousand only) in 1978. Constructed a house in 1981. Expired in January 1999. My mother and brother did release deed to me in August 2013 for a consideration of 2Lakhs( two Lakhs Only).

    I sold the property on May 2014 for the consideration of Rs.46,54,000(Forty Six Lakhs Fifty four Thousnad).
    Please give the calculation and tax liability.
    Please also provide the last dates to invest in the property or depositing in capital gain account etc.
    Is there any options to minimise the tax (like NHAI or Capital gain account etc.)

    Thanks and regards
    K. Nageshwar
     
  2. Shishir Nayak

    Shishir Nayak Member

    In your acquisition has to be taken from the date when you became the owner of the property for the first time. Hence as per your information the property is not long term. You might be shocked but its is true. You might think you got this property as successor but i ll tell you release deed is not cobered under succession.

    Hence you cant avail deduction.
     
  3. Nageshwark

    Nageshwark New Member

    Please clarify the following sir,

    In release deed I already has 1/3 of share. So Mother and brother released me for 2/3rd of share (Rs. 31,03,000) (Thirty one Lacks three thousand).
    Hence stamp duty is paid in registration for 2/3 of share.

    How the cost of acquisition is taken.

    Is the consideration I paid to mother and brother (Rs. 2 Lacks)
    or
    fair market value on that date ie. Rs. 46,54,000(Forty six lacks fifty four thousand) or

    2/3 of value (31,03,000)

    Please clarify.

    Thanks and regards
    K. Nageshwar
     
  4. Manoj Mehra

    Manoj Mehra Active Member

    The Cost of Acquisition would be the FMV as on 1-4-81 + the amount paid by you to your sister and mother (i.e. Rs. 2,00,000)

    Indexation benefits would also be allowed on this cost.
     
  5. V K Khanna

    V K Khanna Active Member

    Further to what Mr Manoj has suggested and the fact that it is an ancestral property the capital gain would be determined as under:-

    Indexed cost of acquisition =FMP * CII of the year in which the property was sold/CII of
    the year in which the asset was first held by the curr
    ent owner(1999) + consideration amount paid to
    sister & mother

    Sale consideration - indexed cost of acquisition will be your capital gain
     
    gaurav_kumar likes this.
  6. Nageshwark

    Nageshwark New Member

    Please clarify

    I sold the property. I am one of the three legal heirs.
    So we need to take 1/3 of 1981 fmp ?

    Thanks and regards
    K. Nageshwar
     
  7. V K Khanna

    V K Khanna Active Member

    Since you were not one of the legal heirs of the property as on 1.4.1981 and on that day the property belonged to your father, the FMP as on 1.4.1981 will be determined for the property as a whole and not for your one third share when the property was sold.

    However, for computing your share of capital gain from the transaction, you would need to take 1/3rd share of sale consideration as well as 1/3rd share of FMP as on 1.4.1981.
     
  8. Nageshwark

    Nageshwark New Member

    I request u to kindly clarify.

    FMP in 1981 is Rs.36,000(Thirty six thousand only). (Plot 6,000 + House 30,000)

    FMP in 2013 is 46,54,000(Forty six lacks fifty four thousand)
    But release deed give the consideration to brother and mother as Rs.2,00,000(Two Lacks).
    Registration charges (Stamp duty) is paid for 2/3 of Rs. 46,54,000.

    In 2014, only I sold the property and received the consideration of
    Rs. 46,54,000(Forty six lacks fifty four thousand) as per FMP.

    Now 1/3 share of sale consideration.

    YOU SAID """ YOU WOULD NEED TO TAKE 1/3RD SHARE OF SALE CONSIDERATION AS WELL AS 1/3RD SHARE OF FMP AS ON 1.4.1981


    Sale consideration is received only by be. SO I need make 1/3 of this 46,54,00 ?

    Thanks and regards
    K. Nageshwar
     
  9. V K Khanna

    V K Khanna Active Member

    If you are full owner of the property you sold, pl go to the reply no 5 of your thread, and
    if you have 1/3rd share in the property, then pl see my reply no 7.
     
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