Capital gains calculations for property purchased 40 yr back

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RAMA KANTH BALINA

Delivery Manager

21 Points Posted on 07 January 2019

Sir / Madam,

I sold one property which was actually purchased by my father in 1978 . as per the sale deed the amount of purchase is Rs.2350.00 for 215 Sq yards. However i sold the property last month for Rs.1,00,00,000.00 ( 1 Crore ). The Entire Transaction was done in White ( recorded in sale value in the deed which was registered after paying stamp duty by the buyer). Now how do i calculate the capital gains as some guys gave the following references below :

As per the IT Act 2017 any property purchased before 2001 then it has to take the bench mark of 2001 year as value ( in 2001 the property market value as given by local state revenue authorities (MRO) is Rs.1000.00 per square yard. So will my property purchase value should be Rs.1000 * 215 sq yrds (Rs.2,15,000.00) or purchase price should be Rs.2350.00 for 215 sq yrds as recorded in sale deed?
As per the Income Tax Site the Cost Index Value for 2001 year is 406 and cost index value for 1981 is 100. so should i calculate the Cost index price of the year 2001 or 1981 ?
Overall how much tax i need to pay ... can some one please help in clarifying this case.

Thanks

Ramakanth

Replies (2)

v k s supraja

intermediate

216 Points Posted on 08 January 2019

It may be noted that Budget 2017/ Finance Act 2017 has proposed amendments in provisions relating to indexation for the purpose of determining long term capital gains. Base year has been shifted from FY 1981-82 to FY 2001-02. Hence Cost inflation index (CII) for FY 2001-02 be 100.

Any asset purchased before 2001 CII for FY 2001-02 should be considered for calculation of capital gain.

sale consideration= 10000000
Less: Indexed cost of acquisition:
COA *CII 9f FY 2018-19/CII of FY 2001-02
(2350*280/100)= 6580
Hence long term capital gain = 9993420