capital gain on parental property
sobhit
(Querist) 13 November 2015
This query is : Resolved
Sir
My grand father has an house 30year old. Now he died and the is came in the name of my father and grand mother and chacha. Now we are selling this house. What is now capital gain. What istax applicable on it. How to save the tax. Is my father can give the ant in my house loan..whole process of account opening in bank and alll .. Plz tell
Anirudh
(Expert) 14 November 2015
First you have to find out when the property was originally purchased.
As you say that it was 30 year old property, I take it that it was purchased after 1.4.1981.
In that case, find out the consideration that was paid for purchase of the property. Find out the stamp duty paid at the time of purchase of property. Both put together is the initial cost of acquisition of the property.
You have to apply cost index to the said value (to take of inflation.) This will give you the indexed cost of acquisition.
Now you know what is the sale consideration.
If you deduct from the sale consideration, the indexed cost of acquisition, the remainder is the CAPITAL GAIN.
On the capital gain, you have to pay 20% Capital Gains Tax.
There are methods by which the payment of capital gains tax can be avoided by adopting tax saving methods. Some of the tax saving methods are (i) buying or constructing new property by spending the entire amount of capital gain; (ii) depositing the entire amount of capital gain in Bonds issued by National Highway Authority of India or Rural Electrification Authority etc.
It is not clear what you want to say when you ask: "Is my father can give the ant in my house loan." Come with clear query.
C. SANJEEVA RAO
(Expert) 14 November 2015
Mr. sobhit, while put the query before any one for the expert advice ur query should be very precise and clear, ur query is more confusing. For calculation of the capital gains tax under income-tax act, date of purchase/acquisition/transfer and also the date of sale is more important. After the demise of your grand father, when the property was transferred in your father's name by virtue of WILL/inestate, was not clear from your query.
Guest
(Expert) 14 November 2015
Approaching the CA Club of this Forum Would Sort Out All your Issues by Professional CAs.
Rajendra K Goyal
(Expert) 14 November 2015
Facts not enough to advise exact situation, consult local tax consultant.
