treatment of capital gains.

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khushboo dassani (Querist)
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26 July 2010 suppose there is a property that has been purchase from the kings ruling the country around 200 years a ago.this property has been transferred from generation to generation and the seventh generation of the family sold the property will this attract capital gains? coz somebody told me that any property that has is 100 yrs old will not attract capital gains under the Income Tax Act? so please help me out n do let me know how to calculate the capital gains in that case...??

CA Ghanshyam Joshi

CA Ghanshyam Joshi (Expert)
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27 July 2010 Annual value of palaces of former rulers [Section 10(19A)] - The annual value of any
one palace in the occupation of former Rulers would be excluded from their total income
provided such annual value was exempt from income-tax before the de-recognition of Rulers
of Indian States and abolition of their privy purses.

but this is not exactly the answer which you want.

CA Ghanshyam Joshi

CA Ghanshyam Joshi (Expert)
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27 July 2010 Fair Market Value as on 1-4-1981 will be considered as cost of acquisition.
Indexed cost is allowed.
Sale Consideration less Indexed cost of acquisition and indexed cost of improvement equals to Long Term Capital Gain.

khushboo dassani

khushboo dassani (Querist)
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28 July 2010 thank u so much but yet i am not satisfied with the answer because this is the way i calculated it but some one told that only 0.02% tax would be applied on such capital gains. i will verify again but do provide me info if u get any in this regard.

CA Ghanshyam Joshi

CA Ghanshyam Joshi (Expert)
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28 July 2010 I have not found any specific exemption from computation of Capital Gain based on case given by you.
If you come accross such specific provision, then please let me know also.

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