Income Tax on Sale of Family Property

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  1. BKS

    BKS New Member

    Our family property (land) was sold & we got settlement of 10 lacs each.
    My question is
    1. Does this attract Income Tax ?
    2. If yes
    - what is the rate of interest & Tax is applicable on what amont
    - is there a way to avoid tax
    - say by investing in property (land) in individual capacity or in joint with other family members.
    - by investing in tax saving bonds - if so what is a suitable scheme.

    Kindly provide sthese information.
    Rgds, BKS
     
  2. rudrabose

    rudrabose Active Member

    1. Yes, this will attract Capital Gains Tax. If this property has been held for more than 3 years - the rate of tax would be 20% on the gains that arise on sale of this property. For conputation of gains, kindly refer - http://www.charteredclub.com/capital-gain-tax/
    2. If you reinvest the gains in another residential property or in specified bonds - you can claim exemption from payment of capital gains tax. For more on this, kindly refer - http://www.charteredclub.com/section-54/
    3. To claim exemption you may either invest in your indicidual name or in joint name.
    Feel free to ask in case of any further queries.
     
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