Calculation of tax
Abhishek Gupta
(Querist) 16 April 2015
This query is : Resolved
Hello, My Grandfather has given his self owned property to me by GIFT DEED (Registered)in 2010.He purchased that property in 1972 for Rs 2100. Now Grandfather has passed away in 2015. Now I wish to sell this property.
I would like to know the following:
1) What would be the tax liability on me and how it will be calculated?
2)Will this fall under Long/Short term capital gain?
3) What are the ways to save the tax applicable?
Regards,
Abhishek Gupta
Jayaraj Poojari
(Expert) 16 April 2015
1. You would be liable to Long Term Capital Gains Tax. Please consult a CA to know on how it would be calculated.
2. Long Term Capital Gain as you are holding the property for more than 36 months (Since 2010).
3. There are certain provisions under IT Act which provide exemptions for Capital Gains tax under Sections 54, 54B,54D,54EC, 54ED, 54F, 54G, 54GA and 54H. Consult a CA on how to save tax using the above provisions.
ajay sethi
(Expert) 16 April 2015
raise query in CA club india.com
Anirudh
(Expert) 16 April 2015
First you have to ascertain the fair market value of the property as on 1.4.1981. This will be done by the official valuer.
Once this is done, you have to apply the cost indexation to the same to arrive at the indexed cost of acquisition in the year when you propose to sell the property.
From the sale proceeds, you have to deduct the indexed cost of acquisition.
The difference is capital gain.
Since the property was held by you for more than 3 years, it is a long term capital and consequently the capital gain is the long term capital gain. It attracts 20% tax.
There are methods, by which you can save the capital gains tax like purchasing a new house (subject certain conditions), purchasing specified assets like Bonds of National Highway Authority or Rural Electrification Authority.
