Taxability !!!
This query is : Resolved
29 May 2014
Dear Expert,
I would like to know whether Sale of Paternal property liable to Tax ???
Pls Suggest with Explanations !!!
Thank You.
I would like to know whether Sale of Paternal property liable to Tax ???
Pls Suggest with Explanations !!!
Thank You.
Guest
Guest
(Expert)
29 May 2014
Sale of property is alwayz liable to tax.....
why would it be not taxable...
it will be dear.........
why would it be not taxable...
it will be dear.........
Guest
Guest
(Expert)
29 May 2014
liability of tax arise only after calculating profit or loss
29 May 2014
If i got the property from my father by WILL, then ??
Guest
Guest
(Expert)
29 May 2014
what ever......... if u will sale it .. it would be taxable
29 May 2014
How can I save my capital gain tax ?
29 May 2014
Sale of Agricultural Land liable to tax ?
26 July 2025
Here’s a clear explanation on the taxability of **sale of paternal property** including key points on capital gains and agricultural land:
---
### 1. **Is Sale of Paternal Property Taxable?**
* **Yes**, the sale of any property, whether inherited from your father or purchased by you, is **taxable under capital gains** provisions of the Income Tax Act.
* If you inherited the property **by will**, the cost of acquisition for capital gains purposes is considered as the cost to your father (previous owner), not the value at the time of inheritance.
* The **holding period includes the period your father held the property**, which helps determine if the gain is long-term or short-term.
---
### 2. **How is Capital Gain Computed?**
* **Capital Gain = Sale Price – Indexed Cost of Acquisition – Indexed Cost of Improvement – Expenses on Transfer**
* Indexation benefit is available if it’s a **long-term capital asset** (held for more than 24 months for immovable property).
* If held for less than 24 months, gain is treated as **short-term capital gain** and taxed at slab rates.
---
### 3. **How to Save Capital Gains Tax?**
* **Section 54**: Reinvest sale proceeds into buying another residential house property within prescribed time limits.
* **Section 54EC**: Invest in specified bonds (like REC, NHAI) within 6 months of sale, up to Rs 50 lakh.
* **Section 54F**: If you sell any capital asset (other than residential house) and invest in residential property.
* Claiming these exemptions requires timely reinvestment and proper documentation.
---
### 4. **Is Sale of Agricultural Land Taxable?**
* **Agricultural land is exempt from capital gains tax only if it meets certain criteria**, mainly:
* Located in a rural area (specific distance from municipality limits as per IT Act).
* Land used for agricultural purposes.
* **Agricultural land situated in urban areas or land that does not qualify as agricultural land under Income Tax Act is taxable on sale.**
---
### Summary:
| Scenario | Taxability |
| -------------------------------------------------------------------- | ------------------------------------------------------------------ |
| Sale of inherited paternal property (urban land, house, flat) | Taxable as capital gains (long/short term based on holding period) |
| Sale of agricultural land in rural area (as defined by IT Act) | Exempt from capital gains tax |
| Sale of agricultural land in urban area or not qualifying rural area | Taxable as capital gains |
---
If you want, I can help you calculate estimated capital gains and plan tax-saving investments! Would you like that?
---
### 1. **Is Sale of Paternal Property Taxable?**
* **Yes**, the sale of any property, whether inherited from your father or purchased by you, is **taxable under capital gains** provisions of the Income Tax Act.
* If you inherited the property **by will**, the cost of acquisition for capital gains purposes is considered as the cost to your father (previous owner), not the value at the time of inheritance.
* The **holding period includes the period your father held the property**, which helps determine if the gain is long-term or short-term.
---
### 2. **How is Capital Gain Computed?**
* **Capital Gain = Sale Price – Indexed Cost of Acquisition – Indexed Cost of Improvement – Expenses on Transfer**
* Indexation benefit is available if it’s a **long-term capital asset** (held for more than 24 months for immovable property).
* If held for less than 24 months, gain is treated as **short-term capital gain** and taxed at slab rates.
---
### 3. **How to Save Capital Gains Tax?**
* **Section 54**: Reinvest sale proceeds into buying another residential house property within prescribed time limits.
* **Section 54EC**: Invest in specified bonds (like REC, NHAI) within 6 months of sale, up to Rs 50 lakh.
* **Section 54F**: If you sell any capital asset (other than residential house) and invest in residential property.
* Claiming these exemptions requires timely reinvestment and proper documentation.
---
### 4. **Is Sale of Agricultural Land Taxable?**
* **Agricultural land is exempt from capital gains tax only if it meets certain criteria**, mainly:
* Located in a rural area (specific distance from municipality limits as per IT Act).
* Land used for agricultural purposes.
* **Agricultural land situated in urban areas or land that does not qualify as agricultural land under Income Tax Act is taxable on sale.**
---
### Summary:
| Scenario | Taxability |
| -------------------------------------------------------------------- | ------------------------------------------------------------------ |
| Sale of inherited paternal property (urban land, house, flat) | Taxable as capital gains (long/short term based on holding period) |
| Sale of agricultural land in rural area (as defined by IT Act) | Exempt from capital gains tax |
| Sale of agricultural land in urban area or not qualifying rural area | Taxable as capital gains |
---
If you want, I can help you calculate estimated capital gains and plan tax-saving investments! Would you like that?
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