My father had purchased a paghdi room in the yer 1968 in mumbai suburbs. It got redeveloped and we got a 1bhk flat in lieu of the same. we purchased extra area from the builder at a price of 18 lacs. During the period of redevelopment, my father expired, and me [the only son, no other brothers or sisters], along with my mother inherited the flat. subsequently we sold the flat. what type of capital gains tax will be applicable?, how it will be calculated? myself and my mother both are senior citizens and do not have source of income, what the amount of tax will be applicable?
Cost of acquisition would be FMV of that house on 01.04.2001 or its stamp duty value whichever is lower on that date.
For FMV you need to get a valuation report from government approved valuer.
Gain would be distributed between both of you if you both are heir of that property and it will be a long term capital gain so you will even get benefit of indexation.
Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.
Thank you.
Hello,
Long Term Capital Gain would be applicable to the sale of the flat. Since the property was acquired before 2001, the Fair Market Value of the property as on 1st April 2001, would be considered as your Cost of Acquisition, which would be indexed till the year of sale. The net figure would be your Long Term Capital Gain. Taxable at 20% plus cess. The Captial Gain would be taxable in the hands of both you and your mother.
For Capital Gain Calculation and the tax on it, we need details of purchase and sale.
I hope that this answer satisfies your requirements. For further understanding or capital gain calculation, you can contact us directly at or take a phone consultation.
Regards,
CA Hunny Badlani
Dear Sir,
Hope you are doing well !!
Where a capital asset has been inherited, the period of holding of the capital asset by the previous owner also needs to be taken into consideration in computing the number of years of holding.
As the date of acquisition falls prior to 1 April 2001, you have a choice to consider the Fair Market Value (FMV) of the property as on 1 April 2001 as your acquisition cost.
It is advisable to get the FMV/ valuation of the property as on 01.04.2001 done from the registered valuer.
Government-approved valuers follow a standard process for the valuation and provide a detailed report.
“Assumptions of any type for consideration of value shall not be entertained by the income tax department. In case of any enquiry, the department will consider the value stated in the valuation report from a registered valuer,"
The capital gain will be taxed at 20.8%. You can save tax by investing the sale amount in a new house or purchasing 54EC capital gain bonds.
We may help you in getting the valuation report as we are handing such cases on regular basis.
