Capital gains on sale of immovable poperty

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This discussion clarifies capital gains tax on inherited property purchased before 2001. For properties inherited and sold in FY 2024-25, the cost of acquisition is based on the fair market value as of 01/04/2001, or the original purchase price, whichever is lower. The new budget amendments mean indexation benefits will not apply after 01/04/2001 for properties acquired before that date, but the tax rate options (12.5% or 20%) will be available.

Bhavana

Bhavana (Querist)
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03 August 2024 A property was purchased in the year 1980. The same was inherited through a will by the grand daughter on the owner passing away in 2021. In this circumstance, what should be the cost of acquisition of the property for calculation of capital gains as per the new budget for FY 2024-25 ? Can the cost to the previous owner be considered as cost of acquisitin OR rate as on 01/04/2001 ? How to calculate and arrive at capital gains and tax on LTCG if the grand daughter sells the property in August-24 ?

CA ANILKUMAR B.COM FCA DISA

CA ANILKUMAR B.COM FCA DISA (Expert)
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03 August 2024 Cost of land or Fair Market Value as on 01.04.2001 at the option of assessee can be taken as cost of acquisition, but FMV shall not exceed stamp duty value. Also indexation benefit will not be available after the new amended law.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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03 August 2024 Indexation benefit available for the property acquired before 01/04/2001. It's clarified by the income tax department.

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CA ANILKUMAR B.COM FCA DISA

CA ANILKUMAR B.COM FCA DISA (Expert)
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03 August 2024 Sir, the clarification was given on calculation of cost of acquisition if property purchased before 2001. Also the word used in amended section is "transfer" not acquisition. If clarification available kindly share for our knowledge.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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04 August 2024 The government has clarified that indexation benefits for properties bought till 2001 will continue. This means the price of properties that were bought before 2001 will be taxed after factoring in indexation based on the price in 2001 or price at which it was bought plus indexation till 2001 whichever is lower, explains Revenue Secretary Sanjay Malhotra in a media interaction.

CA ANILKUMAR B.COM FCA DISA

CA ANILKUMAR B.COM FCA DISA (Expert)
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07 August 2024 Asper the latest amendments, assessee can choose between with indexation @20% or without indexation @12.5% which is lower in case property bought before 2001.

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