Capital gain on sale of inherited flat

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This discussion explores the capital gains tax implications when selling an inherited flat that was exchanged for a new property with a developer. The user seeks clarification on how to calculate the capital gain, specifically whether the Rs 20 lakhs paid for construction costs can be indexed and if a deduction for the original land cost from 50 years ago is possible. The advice suggests considering the market value of the land/old flat as of April 1st, 2001, to determine the cost of acquisition.

Kartik

Kartik (Querist)

10 January 2024 Dear Expert,
Need to understand capital gain implication on following.

We have ancestral/inherited flat (purchased approx 50 years ago) which we have agreed to given to developer, and against the same developer had given us new flat for Rs20 Lacs (20 lacs as a construction cost of new flat). We have registered new flat 5 years back. Now we are selling this flat for Rs50L. We need to understand how much capital gain need to pay and when to pay.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

10 January 2024 Deduct updated indexed cost of 20 lacs to arrive at capital gains from 50 lacs.

Kartik

Kartik (Querist)

11 January 2024 Sir, 20 Lacs which we are paid is basically construction cost of new unit. But can we get additional land deduction as for amount may have paid 50 years back by our Grandfather. If yes, How to arrive cost of acquisition for the same as we dont have any at details/amount of old property purchased.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

12 January 2024 Market value of Land/old flat as on 1st April 2001 can be deducted.

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