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Capital gain

07 December 2013

Hi, I have very recently inherited a house from my father in the year 2013. This inheritance was executed through a deed of gift. If I plan to sell this house now will it come under purview of Capital Gain. If, yes, please suggest a way out. Thanks Shomik Bhattacharyya

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6 Replies

GAUTAM SHARMA (Audit Assistant) (353 Points)
Replied 07 December 2013

Please Don't sell the House at less than Stamp duty Value, otherwise Sec. 50C and 56(2)(vii) will get attracted.

Capital Gain as per Sec. 50C:(seller)

Sale Consideratiom: Stamp Duty Value

Less:Indexed Cost of Acquisition: Previous Owner acquistion cost or F.M.V. as on 1.4.19819Higher of two)

Less: Expenses on Transfer

Capital Gain(Long Term, or short term)

If u want that cap. gain should not be taxed, then apply exemption under sc. 54 series

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Mihir (Wealth Manager) (5293 Points)
Replied 07 December 2013

Is it a flat in a society? Have you become the member of the society after submitting this gift this year? If yes then you probably cannot sell the flat u/s 29 of MCS Act.

If any other property, then yes you may sell it and then you may invest in another property to save tax.

CA MANIK KUMAR (Manager ) (710 Points)
Replied 07 December 2013

your cost willl be deemed to be the cost of the previous owner that is the price at which your father purchased the house(section 49(i)) and period of holding will also include the period of holding of father[2(42A)]. you can sell it at less than stamp duty value as there is no tax implication for you under section 56(2)(vii) as section is applicable to the receiver of the cap asset.

CA MANIK KUMAR (Manager ) (710 Points)
Replied 07 December 2013

but your sale consideration will be assumed as stamp duty value as per section 50C.

Shomik Bhattacharyya (XYZ) (31 Points)
Replied 08 December 2013

Hi All, I am reposting this with required details as have been asked by all of you. Request specific answers, please. 1) My father bought a part of house @ Rs. 20000 (Twenty Thousand) in the year 1988. 2) He executed a deed of gift in Oct 2013 and transferred it onto me. The expenses incurred in this transfer is approx. Rs. 19000. 3) I am planning to sell this off by Jan 2014 for around Rs. 17 lacs. 4) I bought another house @ Rs 19.5 lacs in Feb 2012. I need very specific answers on the above transactions 1) From your earler posts I understand that this will be considered under LTCG not STCG? Is that right? 2) Considering various articles of IT act that you have cited what will be the capital gain tax levied on me. A rough calculation will be extremely helpful.