Dear members,
I had a query about taxations on ancestral property.
My question is if one sells a property, which is an agricultural land which was passed on from generations in the family making it ancestral property. I understand that I will have to pay taxes on it in the form of long term capital gain at 20%.
What are the legal ways to reduce the taxes? ( I live in the city, and do not wish to purchase another property land or house )
- Using market value of property on 1st April 1981 for indexation benefits
- The property may (unconfirmed) be outside 8km radius with population of 1L<10k.
- 50L Capital Gains Bonds
So my main question is that could I get exception from taxes if the land in question is outside of 8km and meets the certain population to be considered as rural area?
Also my father had kept the transaction in a new account in Axis Bank, which may/may not have been a specific CGAS account.
And we have also used that to transfer the funds in standard FDs (which were still kept separately from other accounts.)
If I sold the property on July 2015, when do I have to pay the taxes? Considering this is still the FY am guessing AY will be after 31st 2016? Also do I need to pay any advance taxes for the same?
Please bare with me, as I have a bit limited understanding of Indian Tax laws.
Highly appreciate any and all responses.
- A.K
CAclubindia
