Capital gains tax on inherited property

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 June 2014
my grandfather bought a property in delhi in 1966 for Rs 12,000.
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my father inherited this property in 1997
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my mother and I inherited this same property this year , 2014.
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we have sold this property for 3 crores and bought and apartment for 1 crore , this year-2014

Query:-
would there be any capital gains tax liable to us .if so, could we save capital gains tax by investing the rest of the money in a long term fixed deposit in a nationalized bank.

would really appreciate your help in this matter .

thanks

Nikhil Kaushik

Nikhil Kaushik (Expert)

25 June 2014 capital gains depend on the consideration less cost of acquisition

So:

1. you need to ascertain the fair market value of the asset as on 1 April 1981

2. index the value so arrived till the year of sale ie 2014

3. reduce the indexed cost from the consideration to arrive at capital gains amount.

4. To avoid capital gains, you need to invest the capital gains so arrived (assuming the property is residential house) or the whole of consideration (if the property is not a residential house) in a house property under section 54 and 54F respectively.

5. You cannot save money by investing in Long term FD.

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