Capital Gain Tax

Capital Gain Tax

I am an NRI , person of Indian Origin staying in USA.

Father brought a property: 19-Nov-2010 ( Property Value Rs 5 Lakhs)
Father did a will on my name: 30-Nov-2010
Father passed away: 19-May-2011
Case filed in court to transfer the property to my name: May-2012
Court passed the order to transfer the property to my name: 13 Aug 2014
Final Order handed over to me on : 9 Jan 2015
Patta / Record was issued on my name by Tahsildar: 7-Aug-2015
Current Property Price : 3 Crore

Can you please let me know if i sale the property today if this will be considered as LTCG or STCG. What date will be used as the reference to determine long term or short term capital gain.

What are the ways to minimize taxes. Also kindly let me know the steps i need to follow and consider before i do the sale step by step.

Asked 7 years ago in Capital Gains Tax

Hi,

It will be a long term capital gain and date of purchase of property by your father (Nov 2010) will be considered as reference point for calculation and long term capital gain.

You can minimize capital gain taxes by availing exemption under section 54. The most common exemption which people prefer is as follows:

1. Buying an another residential house within 2 years of sale or construction of residential house prior to one year of sale or within 3 years of sale.

2. Subscribe to NHAI/REC bonds within 6 months from the date of sale.

The step by step process will differ based on the option you choose for exemtpion.

Please let us know your choice and we will guide you.

Trust the above adequately clarifies.

Should you have any further question, please feel free to call/revert.

Thanks and Regards

Abhishek Dugar

CA CS B.Com

Abhishek Dugar

CA, Mumbai

3576 Answers

183 Consultations

4.8 on 5.0

Talk to Abhishek Dugar

Hi Abhishek
a) Is there a limit to Option 1 or Option 2 ? Such as 50 Lakhs.
b) Before I could chose - I am liable to pay tax on my global income. As an NRI, I have to pay taxes anyway in USA.
c) Is it possible to use both the options?
d) for option 1 , is it Okay to buy the new property before ( say 6 month ) of sale of this property in question.

Asked 7 years ago

Hi,

a. Yes, option 2 has a limit of 50 lakhs.

c. Yes, you can choose both the options.

d. Yes, its ok to buy new property before 6 months.

Trust the above adequately clarifies.

Should you have any further question, please feel free to call/revert.

Thanks and Regards

Abhishek Dugar

CA CS B.Com

Abhishek Dugar

CA, Mumbai

3576 Answers

183 Consultations

4.8 on 5.0

Talk to Abhishek Dugar

As per our view It will be considered as LTCG as the date of Will will be considered as date of transfer as transfer through court was only a formality as Will was not registered.

Please let us know whether the property is Residential or Commercial or open land to suggest you the investment for exemption from Capital Gains. As if you have sold residential property then you need to invest on capital gains and in other case the full sale value.

Also let us know the government Value of the property to be registered for Sale.

Shyam Sunder Modani

CA, Hyderabad

1408 Answers

164 Consultations

5.0 on 5.0

Talk to Shyam Sunder Modani

Thank you Shyam. The WILL was registered. But my place it still needs to go through court for ratification. This is a converted land. This 1.73 Acre. The government value of the land is 1.9 to 2 Crore. Please consider the market price as 5.42 Crore. I am looking for buyers who register at market price not the government price. Sales commission will be 15 Lakhs. The cost to convert etc are approx 2 lakhs. Original Purchase price was 5 lakhs. I have done development of the land ~ 23 lakhs but have no receipt. Please note that i have booked apartments 1) 50 L 2) 1.2 Crore that are coming up and almost ready for registration. I think it is an opportunity to minimize capital gain taxes. Need help for the detailed process please. Kindly let me know if i should call. my email id bkm.ngr@gmail.com

Asked 7 years ago

Sir please send all your details to our mail ID modani005@gmail.com along with the dates i.e. date and year of development, conversion date, original purchase price date and year etc to calculate the taxation.

Shyam Sunder Modani

CA, Hyderabad

1408 Answers

164 Consultations

5.0 on 5.0

Talk to Shyam Sunder Modani

Hello Sir,

The date of acquisition shall be the date on which your father has purchased the property. You will be elligible to calculate Indexation from that date.

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, ACA, LLB-GEN, CERT. FAFP

Rohit R Sharma

CA, Mumbai

2104 Answers

95 Consultations

5.0 on 5.0

Talk to Rohit R Sharma

Hello Sir,

It will be considered as a LTCG and you will be elligible to claim indexation from the date on which your father has purchased the property.

Regards

CA Keerthiga Padmanabhan

M.Com., CA, LLB

Keerthiga Padmanabhan

CA, Greater Mumbai

784 Answers

27 Consultations

5.0 on 5.0

Talk to Keerthiga Padmanabhan

Hello Sir,

In order to obtain detailed analysis of your Capital Gain transaction, you will have to opt for the call option in order to understand your query and give you a detailed path on options in which you can save up or minimize your taxes.

Regards

CA Keerthiga Padmanabhan

M.Com., CA, LLB

Keerthiga Padmanabhan

CA, Greater Mumbai

784 Answers

27 Consultations

5.0 on 5.0