Tax for sale of property obtainted as a child

Tax queries 345 views 3 replies

Harsha

Software professional

214 Points Joined May 2011

Dear Experts,

When I was very young, a property (rural site as marked as agricultural land in deed document) was bought by my parents in my name. It is 33+ old. Now the area comes under residential control of a Town Municipal Corporation. So I guess that the agriculture land tag has been removed.

Now I intend to sell it. So does it come under Long Term Capital Gains?

Thanks for the clarifications.

Regards,

Harsha Vardhana R

Replies (3)

Harsha

Software professional

214 Points Joined May 2011

Dear Experts,

I would be grateful if any of you can throw some light.

Also I am in a awkward situation. Though the minimum Registration Rates (fixed by Revenue Dept) are fixed, I may have a lower amount at hand because we don't have all documents. The folks are informing that the buying person has to pay the Revenue charges for taxes for minimum Registration Rates.

While filing the IT returns, do I need to mention the actual amount received or minimum Registration Rate calculated price? If I mention the lower actual amount, I may be suspected by IT department.

Please help me in this crucial matter.

Have a great Diwali.

Regards,

Harsha Vardhana R

Mihir

Wealth Manager

5293 Points Joined December 2008

You are required to show the amount specified in the sale deed in your ITR. What is the issue here? You are getting the price for the property which is less than the stamp value? If that is the case, then the difference between the two will become taxable as income from other sources.

Harsha

Software professional

214 Points Joined May 2011

Thank you, Mihir!

If I mention the lower (actual) value, you are clarifying that difference shall become "income from other sources". Tax on that can be even higher than 20% flat on LTCG. Also IT folks may suspect me!

Anyway, let me concentrate on Income than taxes!

Have a great Diwali!.

Regards,

Harsha Vardhana R