Cg on ancestral property sale distribution

This query is : Resolved

Quick Summary

This discussion clarifies the capital gains tax (CGT) implications when an ancestral property is sold directly without prior transfer to heirs. The capital gains are calculated after indexation and then divided among the three brothers. Each brother reports their share of the gain in their Income Tax Return (ITR) and pays the applicable tax. The grandchildren receiving distributions from their fathers do not incur a tax liability on these amounts.

hemang shukla

hemang shukla (Querist)
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26 December 2025 My father s ancestral property was directly sold without first transfer to our name. The sale agreement was with us, the three brothers and three cheque were given on the three names.

The proceeds are further distributed to the grand children on our own.

How should the CG be calculated and reported in ITR by us and the grand children

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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26 December 2025 Calculate the net capital gains after indexation.
Divide the gain among three sons. Declare the gain in the three brother's ITR and pay tax accordingly.
Tax liability over their children does not arise.

hemang shukla

hemang shukla (Querist)
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26 December 2025 Thank you for a quick explanation

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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26 December 2025 You are welcome.

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