Sandipan Roy 12 July 2022

Long term capital gain taxation for property sell

Hello

My mother in law along with her two daughters inherited a property of my father in law which was purchased in 1954. They want to sell the property now. I have few queries . If anyone can advice I will be thankful

1) Can they ( all 3 of them) open a Long Term capital gain account jointly?

2) Will their share of income be equally distributed after the sell of the property ?

3) Will 3 of them be taxable equally ?

4) If they want to purchase a new property will all 3 need to be co owners ?

5) Can only one of them be the owner of the new property ?

5) What will be the tax implications if all 3 are co owners or only one is the co owner of the new property ?

6) Within what period the new property needs to be purchased to get tax exemption?

5) Property was purchased at Rs 3000 in 1954 .

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Dr. MPS RAMANI Ph.D.[Tech.] (Scientist/Engineer) 12 July 2022

There is no need to open any bank account unless you want to escape capital gains tax and for that purpose you are not purchasing the new property within the same financial year. If the mother and 2 daughters are the only surviving heirs they will have equal share in the property. They can jointly sell the property to a purchaser and ask the purchaser to make 3 equal separate payments to the three sellers. Each of the three will be liable for her own capital gains tax. They have to pay the tax accordingly. In other words each will be liable for 1/3 of thw total capital gains tax. The actual tax payable will depend on their other tax liabilities and tax exemptions, if any. If they had no other taxable income and not filing income tax returns, they will have compulsorily file returns for the relevant assessment year. There are also time limits for the payment of tax.