Ancestral Property sale - daughters tax liability

Tax queries 1898 views 3 replies

nsquare

test

24 Points Joined January 2011

Hi, I have a close relative who has this situation.

She is married 30 years ago. She has a sister and 3 brothers. They have sold a land which was owned once by their father around 1980. Now the 7/12 form(land record in maharashtra) of the land has only the names of 3 brothers. They recently sold this land to a developer. The sale deed has names of all 5 (sisters and brothers)collectively as seller.

She and her sister received the money around 25 Lakhs + as this sale from the developer via cheques. Brothers got much more than what they received. Does she liable to the tax? or will it be considered as arrangement? How should the tax be calculated in case? what are the ways to save the tax?

Thanks in advance

Replies (3)

Advisor

Advisory

107 Points Joined May 2008

She has to pay tax like her brothers and the same calculation method would be applied.

SIDHARTH DHIR

senior articled assistant

623 Points Joined June 2009

agree with mr advisor

CA PARAS BAFNA

Practising CA

33428 Points Joined April 2009

First it has to be clarified that whether the land is an agriculture land or a non-agriculture land.

Assuming the land as non-agriculture land, I am posting this reply.

The valuation of the land as on 01.04.1981 , is required to be done with an approved valuer.

Such value multiplied by 7.11 will give the Indexed Cost of Acquisition.

Capital Gains = Sales Consideration

Less:(Indexed Cost of Acquisition+ Any expenditure in connection with sale like brokerage etc.)

* % of amount received to total sales Consideration has to found.

Suppose Out total sales consideration of200000/- your relative/sister gets20000/ her share will be 10%

Her Capital Gains will be: Total capital gains x 10% ( or her share).

For saving tax on such capital gains she has either to invest the entire consideration received by her for purchasing or constructing a Residential House within a prescribed time limit U/s 54F. or

She can invest , the amount of capital gain in Capital Gain Bonds . Section 54EC

Share of sisters and brothers may be termed as family arrangement as there may be varying shares.