Cgtax on ancestral property

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Retiered
24 Points Posted on 17 February 2013

 

My father(92Yrs) sold Ancestral property in Pune for Rs. 90 lacs in Dec.12

Property is 100 years old & its Market price is Rs.3.08 lacs as 01.04.1981 as per

Gov. app.reg.Valuer.

My father has one daughter(67Yrs) & one son(64Yrs).My mother is 86 Years old & is bed ridden.

My Father wishes to pay 1/3rd portion of sale proceed to his daughter as per her right.

What  is tax implication? How he shall distribute the proceeds so that there be minimum tax or no tax?

Also he does not wish to buy new property but wish to invest Rs. 50 lacs in Tax  saving bonds.

Please give your suggestion on the issue.

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On 17 February 2013 at 12:28 Report
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CA; CS-Final (One Group); DISA (ICAI); I
442 Points Posted on 18 February 2013
Originally posted by : Madhav Parshuram natu

 

My father(92Yrs) sold Ancestral property in Pune for Rs. 90 lacs in Dec.12

Property is 100 years old & its Market price is Rs.3.08 lacs as 01.04.1981 as per

Gov. app.reg.Valuer.

My father has one daughter(67Yrs) & one son(64Yrs).My mother is 86 Years old & is bed ridden.

My Father wishes to pay 1/3rd portion of sale proceed to his daughter as per her right.

What  is tax implication? How he shall distribute the proceeds so that there be minimum tax or no tax?

Also he does not wish to buy new property but wish to invest Rs. 50 lacs in Tax  saving bonds.

Please give your suggestion on the issue.

The Cost Inflation Index for the FY 2012-13 is 852. Accordingly Indexed cost of acquisition for this property sold in December 2012 is Rs. 26.24 lacs (3.08*852/100) and your father earned Long Term Capital Gain of Rs.63.76 lacs (90-26.24).

Since your father is investing Rs.50.00 lacs in Capital Gain Tax Saving Bonds, hence only balance Rs.13.76 lacs (63.76-50.00) will be taxable as Long Term Capital Gain which is taxable @ 20% plus Education Cess @ 3% i.e. @ 20.60%. Your father has to pay LTCG tax of Rs.2.67 lacs (13.76*20.60%) for this transaction.

 

1 Reply
On 18 February 2013 at 21:53

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