Seeking Advice on Capital Gains Tax for Inherited Property Sale in India

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This query is : Resolved

Megha Gulati (Querist)

23 February 2025 I am seeking guidance on the potential tax implications for a property that is intended to be sold soon. The property, located in New Delhi, was inherited from my grandfather who passed away in 2016. After his demise, the property underwent a freehold conversion in December 2023 and was registered in my father’s name, who is 60 years old. We completed the necessary family agreements for the freehold conversion last year, with all siblings signing off.

We are currently looking for buyers, with an expected selling price of Rs. 85-90 lakhs. We aim to use the proceeds from this sale to purchase a residential property in Bengaluru. We are looking to understand the capital gains tax liability, considering it was inherited and only recently converted to freehold. The key points are:

- The property was originally purchased by my grandfather (exact purchase year and cost unknown).
- It was inherited by my father in 2016 but only transferred in his name in 2023 after conversion to freehold.
The expected sale year is 2025 after being in the family for an extended period.

Also, is there any circle rate of any area? That maximum price for which the flat is x lacs so is it true that one cannot sell the flat beyond that price?

We are interested in understanding potential tax exemptions or benefits associated with reinvesting the sale proceeds in another residential property.

Could you please advise on the anticipated calculation of capital gains, applicable tax exemptions, and any strategic advice on reinvestment for tax relief?

Nikhil Kaushik

Nikhil Kaushik (Expert)

23 February 2025 1. the transaction would remain long term ( refer https://surl.li/bcgewe)
2. if he is buying another property, there should not be any issue with capital gains.

happy to help you with actual compliance wherever required.

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