Long term Capital Gain on sale of a very old house

Share This Thread
  1. Dear Sir ,

    I would like to be get clarified whether the following calculation of LTCG from sale of a house property ,based on the stated background, is ok or not. If you find the approach of calculation is wrong , please advise to correct the same

    The Background :

    We (myself , my elder brother and my 3 elder sisters) have inherited a very old house from our mother who expired in January,2006 (FY 05-06). My mother inherited this century old ancestral property from her father who expired in 1975. We have no idea about the cost of the house which can be used for computation of LTCG . Only we know the reasonable value of the property as Rs 6( six) lakhs , certified by a registered valuer in October,2004 (FY 04-05). Since the old property was constructed much before 01-04-1981 and we do not have any other value of the same, can we take Rs six lakhs (as certified by the valuer in 2004) as value of the property on 01-04-81 ?

    The mutation of the property was granted in favour of five of us in October 2008 (FY 08-09)

    The property was sold at a value of Rs 13(Thirteen) Lakhs in April , 2014 (FY 14-15)and each one of us got Rs 2.60 Lakhs.

    Computation of Long term Capital Gain was done in the following manner :

    Index in FY 2014-15 : 1024

    Index in FY 1981-82 : 100 since the property was made before April 1, 1981

    CII (Cost Inflation Index ) = 1024 / 100 = 10.24

    Index Cost of Acquisition : Rs 6,00,000 * 10.24 = Rs 61,44,000

    Long Term Capital Loss = 13,00,000 less 61,44,000 = (-) Rs 48,44,000

    Conclusion : Since the sale value got distributed to five individuals , each one will show Rs 9,68,800 as LT Capital Loss in his/ her return.

    Please advise the changes need to be made .
    Thanks and regards
    S Mukhopadhyay
  2. Manoj Mehra

    Manoj Mehra Active Member

    The assumption wherein you have taken the market value of Rs. 6 Lakh as in 2004 the same as market value of property in 1981 is not correct.

    You would be required to contact a certified valuer or a CA who will help you compute the market value for 1981
  3. Can anyone provide any contact details (in Kolkata) of a certified valuer or a CA who will help me in getting the market value for 1981
  4. gaurav_kumar

    gaurav_kumar Well-Known Member

    You can try searching on Just Dial and you'll get contact info of all CA's in your vicinity.
Draft saved Draft deleted
Similar Threads Forum Date
long term capital gain Income Tax Yesterday at 2:45 PM
Long Term and Short Term - Gains from Equity Investing Income Tax Feb 9, 2018
Long term Capital gain - 10(38) Income Tax Dec 19, 2017
How to save tax on long term Capital gains Income Tax Nov 24, 2017