Taxability of LTCG

If a person sells his property which was purchased 30 years back and distributes the proceeds between his sons, how the LTCG calculated? 

Is it taxable in the hands of seller irrespective of transfer of proceeds to legal heirs? 

Can the gain be utilized to clear the existing housing loan to get relief from tax? 

Replies (3)
Quick Summary
This discussion clarifies the taxability of Long Term Capital Gains (LTCG) when property is sold and proceeds distributed to sons. The capital gain is calculated based on the sale price minus the indexed cost of acquisition or fair market value as of April 1, 2001, whichever is higher. Importantly, the LTCG is taxable in the hands of the seller, not the legal heirs, and cannot be used to clear existing housing loans for tax relief.

LTCG is in hand of legal owner
Mr. Prameela
Capital gain calculate as follow : -
FVOC - Net consideration

COA( with indexation) - Fair market value on
1/4/2001 or Cost,
whichever is higher

Long term capital gain. =. ××××××××××××

Above capital gain will be taxable in hands of seller, not in hands of legal heirs.

No exemption benefit available on clear of home loan.

FMV or Fair market value is entered by the user as per what is mentioned in the Budget 2018. The LTCG tax liability is calculated assuming: You have entered all long term capital gains / loss transactions which are subject to the proposed 10% LTCG tax plus 4% cess for FY 2018-2019.

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