Rate of capital gain tax
SUKHPAL SINGH
(Querist) 28 September 2011
This query is : Resolved
Dear Sir,
I wish to place my following queries for reply by experts;
1. Please advise me the rate of capital gain tax to be paid by individual on income earned out of sale of ancestral property or ancestral resources?
2. I am about to retire from IAF in near future. I wish to know what will be my tax liabilities on the amount received on retirement against AFPPF, Gratuity, Leave encashment, AFGIS (Air Force general insurance Scheme)etc. ?
With warm regards and best wishes,
Sukhpal Singh
A V Vishal
(Expert) 28 September 2011
1. Please advise me the rate of capital gain tax to be paid by individual on income earned out of sale of ancestral property or ancestral resources?
Capital gain calculation : To calculate Holding period for the purpose of capital gain ,the period of holding of your father ,grand father will also be included which means it is LONG term property.But the Cost of indexation will be available to you only from when it is being transferred to you.Cost of land of previous owner will be taken and if purchased before 01.01.1981 then cost price or market value as on 1.4.1981 which ever is higher will be cost of that land On this cost ,Indexation will be given . The rate of tax is 20%.
2. I am about to retire from IAF in near future. I wish to know what will be my tax liabilities on the amount received on retirement against AFPPF, Gratuity, Leave encashment, AFGIS (Air Force general insurance Scheme)etc. ?
(i) Leave salary to Central/State Government employee
• Leave salary given to Central/State Government employees at the time of retirement /superannuation in respect of period of earned leave at his credit ,is fully exempted.{section 10(10AA)(i)}
Further the following too are exempt:
Death-cum-retirement gratuity:
 1. Any death-cum-retirement gratuity under the Pension Rules of the Central Government and State Government employees.
 2. Any gratuity received under the Payment of Gratuity Act.
 3. Any other gratuity received by the employee, his widow or dependents to the extent it does not exceed one-half month's salary for each year of completed service taking average salary of ten months subject to a maximum of Rs. 10,00,000.
Commuted Pension: Any payment in commutation of pension :
 i. Received under the Civil Pension Commutation Rules or under any other scheme by a Central/State Government employee.
 ii. Received from a pension fund (Jeevan Suraksha) set up by Life Insurance Corporation
 iii. Received from any other employer subject to the limit not exceeding
  a) 1/3rd of the commuted value of such pension in case where the employee received any gratuity.
 b)  In any other case 1/2 of the commuted value of such pension.
Sailesh Kumar Shah
(Expert) 29 September 2011
I also agree with Mr. A V Vishal.
Further, In India, GOI is in planning to applicable 'Direct Tax Code', if at time of retirement application of DTC, tax could be payble different.
prabhakar singh
(Expert) 29 September 2011
NO ONE CAN DISPUTE THE ADVISE EXTENDED BY MR. vISHAL AS PER LAW IN FORCE AS OF NOW!!!
Guest
(Expert) 29 September 2011
I also agree with Shri Vishal.
