Capital gain

Save Share

This query is : Resolved

N K PRAKASH (Querist)
Follow

25 April 2015 Hi good evening sir

Father and mother expired, for them 2 sons and 1 daughter. Father was a House property, the name of the House transfered and registered from father's name to his first son name with the full consent of their brother and sister.

Now the property in the name of first son. He want to sell the property and the consideration to be shared with all three equally.

will it attract capital gain tax to each or exempted as ancestral property.

please explain.

thanks

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
Follow

26 April 2015 Capital Gains Tax will be levied as ancestral property is also a capital asset.
.
The Capital Gains are calculated by applying
cost inflation index (indexation) on cost of acquisition.
.
Holding period of father is also considered.
.
In the absence of any documentary evidence as regards the legal ownership of the property, the first son only will be liable to capital gains tax.
.

N K PRAKASH

N K PRAKASH (Querist)
Follow

28 April 2015 Hi sir, thank you for your reply.

Since the consideration is going to share equally. Whether the capital gain tax to paid by each person or to be paid by first son only.

to get exemption of capital gain tax, Each person (sharer) what to do?

any investment to be made by all?

pls clarify.

thanks

nkprakash

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
Follow

29 April 2015 The registration is only in a single name. So, in my view, sharing of the consideration is in the form of application of income.
.
On the basis of property documents, only first son is called the owner. Others have either gifted or relinquished their rights in favour of the eldest brother.
.
So, the only liable person to capital gains is the first son only.
.
To save capital gains he can invest in a residential house property.
.
He can gift such property to his younger brother and sister.
.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now