Tax liability on inherited propoery

Try to find fair market value of the property for the year 1981. Compute the capital gains.

Sale consideration

less transfer expenses

less indexed Cost of acquisition

less indexed cost of improvement (if any)

Equals Long term capital gain

If you invest the long term capital in another property or purchase bonds, then tax liability shall be nil.

Originally posted by : Mayukh Choudhary
	Please  advice on the following case My relative got and inherited property in the month of July 2013 and sold it in Oct 2013. Property was purchased in 1971 for Rs 1500 plus Rs 75 stamp duty ( Land cost of residential property ). In Oct 2013 he sold it for Rs 29 lakhs including land and two story building.  Cost of construction of building is not available.  Please advice tax treatment of the capital gain  Best Regards Mayukh Choudhary

Thanks for reply. further to add if the sale consideration invest in further property is exemption available in Long term capital gain

Exemption u/s 54 is available if one invests in another property within 2 years or purchase bonds within 6 months from the sale consideration. If the new property is to be purchased after the due of filing ITR u/s 139(1), the sale consideration is to be deposited in capital gain account.