Tax on inherited property sale

It will be long term. Date of acquisition will be from. Thr date of acquisition of your father 

Yes, but date of acquisition in your case is governed by different section. In your case date of acquisition will be deemed from the date, when your father acquired property

Cost of Acquisition for Inherited Property 

Rule: Cost of acquisition = What your father originally paid for the property (not current market value)

Fair Value (FV) Exception:

• If your father acquired the property before April 1, 2001, you can choose the higher of:

  • His original purchase price, OR
  • Fair Market Value as on April 1, 2001

Your Case:

• Need to check when your father bought the property
• If bought after April 1, 2001 → Use father's original purchase price
• If bought before April 1, 2001 → Use higher of purchase price OR FMV on April 1, 2001

Indexation Benefit:

• Available for LTCG calculation
• Apply cost inflation index from year of father's purchase (or April 2001 if using FMV) till year of sale

Bottom Line: The stepped-up basis rule (inheriting at current market value) doesn't apply in India. You inherit at your father's original cost, with the April 2001 FMV option if applicable.

Check your father's purchase documents to see the acquisition date and cost.

It would be a long term capital asset and the gain/loss generated would be long term capital gain/loss. In case of inheritance of the property, date of holding of the asset would be considered since the date of holding by the previous owner. In the same manner cost of acquisition is considered as cost incurred by the previous owner.

- To save the tax on the capital gain you can take the benefit of exemption u/s 54, 54EC

- If your residential status at the time of sale of the house is NRI then TDS implications would be different as compared to resident

For detailed discussion on other points you may opt for phone consultation