Capital Gain from House Property

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When inheriting a house and then receiving it as a gift, the original construction date is considered the acquisition date for capital gains tax purposes, not the year of inheritance or gifting. This typically results in long-term capital gains. To potentially reduce this tax liability, the individual who inherited the property needs to invest the capital gains amount (not the full sale proceeds) in eligible assets like Capital Gains Bonds or a new property.

RUCHI SHARMA

RUCHI SHARMA (Querist)
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26 September 2022 Hello Sir/Madam,
My father-in-law had constructed house property in 1990, which my husband received through WILL this year (2022) after his sad demise.
My husband gifted this property to me, if I SELL this property within a year; what will be considered as Acquisition Date (1990 or 2022) for capital gain calculation? Will it be LONG TERM CAPITAL GAIN or SHORT TERM CAPITAL GAIN ?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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26 September 2022 Acquisition date will be 1990 .
It's long term capital gains taxable in your husband's hand. Clubbing provisions applicable in case of gift to wife.

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RUCHI SHARMA

RUCHI SHARMA (Querist)
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26 September 2022 Thank you so much sir for your reply.
For saving Long Term Capital Gain Tax, do I need to invest or my husband need to invest in "Capital Gains Bonds" or in new property?
Do we need to invest ONLY the "Capital Gain" amount or entire proceed from SALE?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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26 September 2022 You need to invest in only on capital gains amount.
Your husband need to invest.

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