Capital gain on sale of share of ancestral property 70 year old

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This discussion explains how to calculate capital gains tax on the sale of an inherited ancestral property. It outlines how to determine the cost of acquisition for an old property, index it to the sale year, and calculate the long-term capital gain (LTCG). The advice covers investing the gains in capital gain bonds or property to claim exemptions under sections 54EC or 54 of the IT Act, and how to divide the tax liability and investment obligations among co-heirs.

Rajdeep Roy

Rajdeep Roy (Querist)
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02 August 2022 What will be the capital gain and how to invest on 2/9 th share of inherited ancestral property after fathers death in 2017 by myself, brother and my mother as legal heir where myself and my brother falls under 30 % income tax bracket and mother is dependent with pan and will have a sell value of 30 lakh. The property is close to 70 year old. How to know the cost of accustion for such a old property.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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02 August 2022 1. Get circle rate of the property as on 2001, from Sub Registrar office. Take it as cost of acquisition.
2. Index it to 2022 for index cost of acquisition. Reduce it from the sell value, to arrive at LTCG.
3. The capital gain can be invested in Capital gain bonds, or any house property to get exemption under sec, 54EC or sec. 54 of IT act.

Rajdeep Roy

Rajdeep Roy (Querist)
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02 August 2022 Thank you sir for your prompt reply deeply appreciate that ! .
Just a quick clarification. Since myself , my brother and my mother are share holder. Can we divide the selling price equally and invest or any one can invest the whole amount. If we divide the money equally how the capital gain amont is shared which we need to invest.

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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02 August 2022 If you divide equally, mostly suggested, then 33.33% of the CG tax liability arises on each. Each can invest said 33.33% of gain amount individually to get exemption.

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