Capital gain

Respected Members,

X sold in June 2011, the Property which he got by succession to his Sister, her Husband and Husband Brother. The property acquired by X's Grand father on 1965, the amount of the same is not known. The grandpa died in 1993. In 1993 X get his share in the property by way of Will. The property actually transfer on X Name in 2001. The Property Sold to21 lacs, Govt Valuation50 lacs, Fair Market Value85 Lacs. The X's has also done Memorandum of Understanding with his Sister that the property sold is her share in the property and has no claim in property in the near future.

Plz guide me the following issues. 1. How to compute capital gains? 2. Whether the MOU made will have any implication while calculating the capital gain? 3. From where the benefit of indexation available?

Replies (2)

kindly consult a CA.... You will get many solutions here but it will be safe if you consult your own CA. You need to see many impacts.

Sales Consideration / F.M.V. on sale agreement (Mobadala), whichever is higer

Less : The indexed Cost of Acquisition

Less : Cost of Transfer

Long Term Capital Gain

Less : exemption u/s.54, 54EC or 54F

Taxable Long Term Capital Gain

Note : 1) Since it is obtained free of cost by you through inheritence, hence the cost of the previous owner would be taken.

2) Since you don't even have the cost of the previous owner, hence you will have to take the municipal valuation value done from a valuer as on 01.04.1981, and then take the indexed cost.

3) MOU is good for being on a safer side so that your share can not be disputed, but there is not much use in Income Tax.

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