Proerty related capital gain tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 November 2009 My father got some property which was bought by his ancestors before 1981. My father sold some of it and invested in another property which is owned by him. He at that time used capital gain tax exemption.

In May 2008, he sold rest of his ancestral acquired property and all the money received by it, he transfered in another property, which is booked in my name. I am his married daughter. I am buying a flat, and in that he gave me that money. The property which I am buying is still under construction and is not registered. It is a builder flat, which will be registered at the time of possession, it is only booked in my name.

Ihope I am clear. Please let me know, is my father liable to pay capital gain tax. AND IF IT SO then what is the procedure of tax calculation. Please reply as early as possible.

Regards

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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08 November 2009 Para 2 of the query
To avail tax exemption the reinvestment should be necessarily in the assessee's name. Here, it is being done not in assessee's name. Therefore, father in the instant case is liable to pay capital gains tax if there is a gain arising out of the transaction.
CITATION : - PRAKASH Vs. ITO (2009) 312 ITR 40 (Bom).

Para 3 of the query
Liability to tax is as explained above. Regarding tax calculation, from the sale consideration deduct indexed cost. Here cost can be taken as incurred by the previous owner or FMV as on 01/04/1981 and the denominator for indexation can be 100.

Querist : Anonymous

Querist : Anonymous (Querist)

08 November 2009 So, if I get this property registered in my father's name, then will he avail tax exemption?

And, how much time limit is there to invest the sale amount to avail tax exemption. I knew that it is 2 yrs from the date of sale. Is it? he sold in may 2008. We are going to get the possession in Feb2010.

And also one single person can avail tax exemption for 2 separate properties registered in his name? If this can be done, I can get that property registered in his name.

Can gift deed save him from tax exemption?
If not. Then please tell me..

Suppose the rate on 1/4/1981 was Rs.672 per sqyrd. Total sqryd is 700 sqyard.
Sale was 28lakhs in June 2008. How much is the tax liablity?