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Ancestral property acquired by a pvt. co. to set up a plant

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Querist : Anonymous

Querist : Anonymous (Querist)

21 June 2012 Hello,

Can someone clarify the tax implication on the compensation received against the acquisition of ancestral property (Sale of Land) from a company?

Further requested to clarify wheather this is taxable under Income Tax or Wealth Tax?

Thanks

In continuation to this I would like to know

1. Is this a capital gain?
2. Is there any ceiling beyond which tax will be paid?
3. How to save the tax?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)

22 June 2012 1. The sale of the property is taxable under the head Capital Gains.
2. Tax rate shall be 20% in case of long term capital gain and shall be computed at slab rate in case of short term capital gain.

If the income of the assessee is less than the exemption limit, the unutilised limit shall be reduced from the amount of Long Term Capital Gain and tax shall be levied on the balance amount.

3. You can invest in a residential house property (Section 54F) or in specified bonds (Section 54EC).

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