Long term capital gain tax on ancestral property

Tax queries 249 views 4 replies

Maneesh M

Others

11 Points Joined September 2015

We are selling my fathers ancestral property. My Father is no more now. We are three legal heirs(wife, myself and my sibling) and have legal heir certificate.

1. While selling if we make sell to my mother(senior citizen) can we exempt from capital gain tax?

2. How to calculate the capital gain tax? We donno who has bought this and for how much. I think this was given to my Fathers mother during partition and it is ancestral property

3. what to do to exempt from the capital gain tax? should we invest in my mothers name, this capital gain alone(not sure how to calculate still) in the capital gain bonds?

Replies (4)

CA. Sourav Sarkar

Chartered Accountant

24588 Points Joined November 2019

1.Yes you can sell the property to your mother. LTCG may arise. Basically ancestral property has no capital gains unless it is not sold.

2. Calculate the Fair Market Value of the property for such CG calculation and take CII of the year in which it is sold.

3. Invest in specified bonds within 6 months of sale in the name of your mother

Sivaramaraju G

Learner

2398 Points Joined May 2019

1. when you sell your share to your mother capital gain tax will be applicable.
my advise is better write a gift deed to your mother for that property. if you give as gift it won't be taxable because she is a relative to you.

2. if you sell your property then you can take fair market value as on 01.04 2000 as cost of acquisition as you are saying you don't know the cost of previous owner.

3. yes you can invest in residential house or capital gain bonds to get exemption.