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Long term capital gain tax on ancestral property


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Querist : Anonymous

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Querist : Anonymous (Querist)
Hello Everyone

Need your valuable guidance

My father bought a property in 1992, the agreement value of which was INRXXXXX/-

This property was constructed in 1975.

Due to my fathers demise now we are selling off this property in the F.Y. 2017 & the agreement value of which is INRXXXXX/-

Do I have to pay long term capital gain tax on the amount received from the sale of this ancestral property?

If yes how is the calculation please assist me on this.

Also how much amount I need to invest in long term capital bonds to avoid the payment of long term capital gain tax

I am really really really very thankful to this forum & all the persons associated with this forum who keep on sharing/replying their valuable & useful knowledge, feedback & thoughts.

It indeed gives me a privilege at times when my accountant is lost or unaware of something & I correct him using the help of this forum.

The replies to my queries in the past have helped me solve my issues swiftly which my accountant was totally unaware of.

Many Thanks in Advance




Deduct the indexed cost as on the date of sale considering market value as on 01/04/2001 from sale value to arrive at capital gains.
Up to 50 lacs u/s 54EC bond can be invested.

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Querist : Anonymous

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Querist : Anonymous (Querist)
Mr.Seetharaman
Thank you for the valuable information.

Please advise me if the agreement value in 1992 is INR400000/-

The agreement value in 2017 is INR3600000/-

We are total of 06 Brothers. So everyone shall get a share of INR600000/-

How much do I have to invest in Long Term Bonds

Many Thanks in Advance

You have to give me market value as on 01/04/2001

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Querist : Anonymous

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Querist : Anonymous (Querist)
Market Value as on 01-04-2001 is INR2500000/-

Many Thanks in Advance

In such a case the indexed cost work out more than your sales price hence no capital gains tax applicable on the sale.

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Querist : Anonymous

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Querist : Anonymous (Querist)
Dear SEETHARAMAN JI

Thank you so much for the knowledge shared by you.

Just one last question.

Out of curiosity.

Construction of the property is in 1975
Property purchased in 1992
Sale of the property is in 2017

What is the reason that we calculate the market value of the property as on 01/04/2001???
How did you work out on the indexed cost???

Many Many Thanks once again in advance

See the link for more information.
https://www.bemoneyaware.com/blog/cost-inflation-index-fy-2017-18-capital-gain/

See the link for more information.
https://www.bemoneyaware.com/blog/cost-inflation-index-fy-2017-18-capital-gain/

how can a property worth Rs. 4 lac in 1992 be worth Rs. 25lacs in 2001. please recheck this amount to arrive at result of your capital gain.

You don't have any agreement or value proof for 2001.

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Querist : Anonymous

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Querist : Anonymous (Querist)
Dear Seetharaman Ji

Thank you so very much for sending me the above link & replying to all my msgs.

Dear Anshul Ji

Thank you correcting my error.
Appreciate your vigilance.

1992 agreement value is INR400000/-
2017 agreement value is INR3900000/-
Market Value as on 01/04/2001 is INR925000/-

Please advise me am I liable to pay capital gain??

Also what is the cost indexation???

Many Thanks AnshulG in advance.

Indeed greatful to the Experts like AnshulG & SeetharamanG for helping people like me.

10,84,000 is the capital gain either pay 20% tax on it or invest in 54EC capital bonds for 3 years.

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Querist : Anonymous

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Querist : Anonymous (Querist)
Dear SeetharamanJi

We are total of 6 brothers.

The amount INR3900000/- was equally distributed among the brothers.

All the brothers file their own return.

Will my individual capital gain be like INR1084000/6=INR181000/-

So I am liable to in invest INR181000/- in capital bonds.

Please advise

Many Thanks in advance.

Since your individual capital gain is 181000. You can following options 1. invest in bonds 2. pay tax @20% 3. in case you are in lower bracket of IT this can be added to your gross income also for calculation of Income tax. 4. Invest this gain in some residential house property.



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