Capital Gains

A women had died during the year 2007. Her husband has died long before. They have no children. She has left behind some fixed deposits and a residential flat. Her brothers and sisters after obtaining a court order disposed off her flat. The consideration and fixed deposits amounts were shared among the brothers and sisters. Each brother / sister got Rs.3.80 lacs during the financial year 2008-09.

All the brothers and sisters who got the money are senior citizens and hence can claim basic exemption upto Rs.2.25 lacs (for asst year 2009-10). I believe any income / amount received by them over and above 2.25 lacs is taxable

Forum members kindly advise whether the amount received by the relatives will be treated as normal income or under capital gains. If treated as capital gains whether the same is eligible for any indexation.

What is the rate of tax under capital gains and how to work out the same.

with regards

Muralidharan

Replies (3)

Here after the death, the capital asset is sold by executor right?So the capital gains tax should be paid by the executor and he should file return as a representative assessee of the deseased assessee. Amount recieveed by relatives from such after tax capital gains will not be taxed for relatives because it is a capital reciepts. The relatives need not include such amounts in their returns.

 Dear Professionals,

I am just a CA final student aspiring for tax practice. Although I m taking my best efforts to give correct solutions, I wanna make sure i dont give wrong advice.Please correct me if I have given wrong solutions. Thanks

The legal heir of the women should have should tax on her behalf after her death and then they should have distributed the balance amount. I think in the courts order taxation part must have been covered.

Balance amount received of brother & sisters is not taxable at all.

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