Capital Gain Tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 June 2010 My father had bought a residential property (with proper documentation)for Rs 5000 in 19 Oct 1937. The property was transffered to me in 1990 as per his registered will. Can anyone please tell considering the cost inflation indexation, what shall be the liable amount above which i have to pay capital gain tax if i intend to sell the same property today. Thanks!!!

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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27 June 2010 You have to first find out the fair value as on 1-04-1981 which is the base year for indexation and then through the indexation you have to find out the indexed cost of the same and then you have to find out the capital gains from sale value - indexed cost. Then on that capital gain you have to pay tax or if you are investing new residential property then you can claim exemption.

CA.ViVeK M ACA

CA.ViVeK M ACA (Expert)
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27 June 2010 Agreed with sreenivaslu.following are the steps you need to take in this connection

Step no 1 Calculate the FM V as on the date of 1st April 1981 and compare with cost of acquisition. If cost of acquisition more than so calculated FM V take your cost of acquisition.

Step no 2 Calculate the indexed cost of acquisition.

Cost as determined in step no 1* CII of current year / CII for the year of 1981(100)

Step no 3 calculate capital Gain

Sales proceeds XXX
Less Indexed Cost As per step 2 xxx
Capital gain/Loss XXX

Step no 4 Calculate exemption(You can claim exemption)

Capital Gain as per step 3 xxx
Investment in new residential property