Inheritance Capital Gain Tax Querry

Tax queries 721 views 3 replies

Anu

self

25 Points Posted on 07 September 2010

Hello Dear fellow members,

My tax querry is as follows:

My Grandfather purchased a residential site in the Aug' 1988.

In Nov' 2006, Joint Dev Agreement was made with a Developer to demolish the house and construct a Apartment in the Plot and 50% of the flats to be retained by us the owners and 50% of the flats to be given to the developer.

Later in Jan' 08 a Partion Deed was regstered identifying myself as one of the owner of a Flat in the Apartment Building constructed, and I was asked to pay a sum of - 3,00,000/- towards the family funds for the same, which I did by borrowing the amount from a Bank loan.

Further I have spent money in furnishing the Flat further for Wood work, Painting work, Electrical work etc.. all of which costed me further -1,50,000/- , Have paid Bank Loan Interest of - 1,00,000/- so far. Also since I had rented out the flat I have a Rent Income of + 2,00,000/- from the Flat.

Now I have sold the Flat for + 17,50,000/- .

The final NET gain from this inheritence is 14,00,000/-, which I have now completely invested in Stock market.

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Now the queries as follows:

1. What is the date taken to decide if this is STCG / LTCG, Is it Aug' 88 the date my Grandfather purchased from Society OR is it Jan' 08 the date Partion Deed has been registered in my name????

2. If it is Aug' 88 please explain how do I arrive at the LTCG tax ???

3. Hope i am allowed to deduct all the expenses (mentioned above) to be adjusted with my above mentioned income???

4. If I give this amount to my husband to close his Home Loan can I avoid tax liabilty??????

Appreciate your response at the earliest.

Bset Regards

Replies (3)

Vicky

CA LCS MCOM

136 Points Posted on 08 September 2010

hi anu..........ur replies are in the attached file

Anu

self

25 Points Posted on 08 September 2010

Ronit;

Sincere appreciation for the response, few clarifications.

In few posts in this Forum I had read about the Original Date of Purchase to be taken especially in cases of inheritance, that is the reason for asking the 1st quesetion, thanks for clarifying.

When I said wood work I mean it is fixed wood work I mean it is not movable furniture it is fixed wood cupboards, does this make any differeance.

You mean STCG tax will be approx 30% which is in excess of 4 Lacs, that will be huge huge blow to me, is there a way out please??

Once again I had read in couple of posts in other forums that if the sale consideration is once again invested in either land / flat purchase is what made me to ask if I can use this amount to close my husbands's loan.

Best Regards

Vicky

CA LCS MCOM

136 Points Posted on 08 September 2010

In few posts in this Forum I had read about the Original Date of Purchase to be taken especially in cases of inheritance, that is the reason for asking the 1st quesetion-original date of purchase is to be taken when property is acquired by way of gift,will or inheritance .

Definition of inheritance: that which is inherited; a title or property or estate that passes by law to the heir on the death of the owner .it means a property is acquired without paying anything on the death of owner.as u paid rs 300000 for the same,it seems that rs 300000 consideration is mentioned in sale agreement of the flat.accordingly,rs 300000 will be treated as ur cost of acquisition and period of holding will start from date of sale deed.correct me if i m wrong abt the actual facts.

When I said wood work I mean it is fixed wood work I mean it is not movable furniture it is fixed wood cupboards, does this make any differeance.---- yes it will ,in that case the whole consideration will be treated towards the flat.no need of biforcation.

You mean STCG tax will be approx 30% which is in excess of 4 Lacs, that will be huge huge blow to me, is there a way out please??------to answer this question,plz clarify me first abt in what manner the property is acquired by u as i m not sure abt the same.

Once again I had read in couple of posts in other forums that if the -----sale consideration is once again invested in either land / flat purchase is what made me to ask if I can use this amount to close my husbands's loan ----to answer this question,plz clarify me first abt in what manner the property is acquired by u as i m not sure abt the same.