CAPITAL GAINS ON INHERITED PROPERTY

The market value as on date of inheritance is of no relevance for the purposes of computation of capital gains. The cost to the assessee shall be the cost to previous owner(s) who has incurred expenditure in acquiring the property. In your case, the cost to brother of assessee's mother shall be the cost to the assessee. Indexation has to be done considering the CII of the year of inheritance i.e. 2005 and not 1997. Further, section 54F is available for any long term capital asset if you intend to invest in any HP

Hello,     my mother is going to sell a house in sringeri for Rs 30 lacs in december 2010, which she had inherited from her mother in 1996 after her mother died throgh will. and  the said property was transfered from her husband somewhere in 1950. this  property is 150 yrs old.  my mother  is  thinking of gifting  the entire amount to her children i.e me, brother and sister.

How do we calculate the Cost of acquisition of this house property? Does she have to invest that amount in another house property just to avoid tax  and  then gift the property to her children?  I want to know  how to calculate  the capital gain in this regard?  what will be the tax payable  if the entire amount is not invested in new property? please help me regarding this topic at the earliest.