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Capital gain on sale of property

Tax queries 1714 views 6 replies

 

My father & my auntie (father's sister) jointly bought flat in 2000. Aunt expired in 2008 (no child nor husband). Society transferred 50% share of my auntie and made my father 100% owner. Father expired in 2010 leaving me as only daughter and as 100% nominee. I sold the flat in 2012. Please advise how to treate for capital gain - A) consider index of 2000 for entire value or B) 50% of 2000 index and 50% of 2008 or C) index of 2008 for entire value. Thanks. 

Replies (6)

In your case, you need to consider the index of 2010 only as you become the owner of the property first time in 2010.

 

 

Thanks

 

Mihir doshi

i think you need to consider the index of 2000 

Dear Raman, Check the provision/section of Indexation. It is clearly written that Benefit of indexation will be given to assessee in the year in which he becomes the owner of the property. In this case, Assessee becomes the owner first time in 2010 only.

 

 

Cost of the property will be the cost of 2000 but Indexation will be for 2010 only.

 

In case, Improvement is done to the property then the case would have been different. In that case Indexation will be the year of improvement.

 

Thanks

 

Mihir doshi

Agree with Mr . Mihir ...

Thank you very much Mr. Mihir. But, a)  Is it not that I have  inherited this flat and hence the year in which my father bought the flat should be considered for index. Further, b) if 2010 is considered then it will be short term cap. gain? Please enlighten. 

1)The only thing we sholud consider while calculating the indexation benefit is the year in which the assessee  helds the asset for the first time.

2) As the period of holding of asset is less than 36 months then the gain arising will be of Short Term Capital Gain. For which the amount is charged as normal income tax rate only. 


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