Long term capital gains

Tax queries 138 views 3 replies

CA PAVAN KUMAR

CHARTERED ACCOUNTANT

68 Points Joined June 2007

I came across a case. A person inherited a residential house from her father through a will (will was dated Dec 1965).

In 2016, she sold the property. From the sale consideration, half of the amount was invested in a new residential house (new house is registered in her son's name). Balance amount, they have kept in fixed deposits. Now, the queries are:

1. Cost to previous owner not known - So what is the way forward;

2. Can the new house registered in son's name qualify for deduction.

Thanks

Pavan

Replies (3)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

208970 Points Joined July 2016

1. Valuation by Approved valuer as on 01.04.1981.

2. As per plain reading of the act........... No.

But search out for any case law in favour.....

Giridhar S Karandikar

Team Lead

7558 Points Joined November 2011

fair market value as on 01.04.81 or cost to the previous owner whichever is more will be considered as COA and accordingly indexed and LTCG wud be calculated.
please note that the entire Capital Gains arising on transfer of capital gains needs to be invested in the new residential house. you can't invest it in any other mode else LTCG tax wud be payable @ 20%. if u want you can invest the. balance capital gains remaining in NHAI bonds upto 50 lacs only

Giridhar S Karandikar

Team Lead

7558 Points Joined November 2011

as per law of inheritance after the death of the assessee the property gets devolved on the immediate legal heirs. since you are the immediate legal heir of your father property needs to be registered in your name only and not in your sons name else you won't get the tax benefit