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Tax on Inherited Property house
I have received inherited residential flat of my father which was purchased at approx Rs. 18000 (Eighteen Thousand) in 1980 in mumbai, area 265 sqft. In 2007 the building got extended and so the flat extended by 110 sqft. I have transferred 50% share of my flat on my wife's name, now we are joint holders. If I sell the flat for 65 Lakhs how much tax will be calculated on sale of inherited property. Request you to kindly guide.
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When you sell your inherited property, you will pay Long-Term Capital Gains Tax because the combined holding period (your father's + yours) exceeds 24 months. You calculate the gain by subtracting the indexed cost of the original purchase (plus any improvement costs) from the sale price. As joint owners, you and your wife will each be taxed on your 50% share of the profit. It is recommended to use the indexation benefit or compare it with the 12.5% non-indexed rate to minimize your tax outflow.
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