Dear Experts ancestral property comes through partition deed from her father dated 28/01/2001. House constructed on the same in the year 2003-04 and the construction cost was Rs.15Lakhs. Now they sold for Rs.65Lakhs sale deed dated 29/09/2017. They don't want to invest anything and finishing up it by paying some tax. My query is that the property comes from four fathers and they don't know the cost of the immovable property? in such circumstances how to find the cost of acquisition and arrive the LTCG tax. Please guide me in detailed. Thanks in advance.
Hi,
You have enough to separately calculate cost of land and cost of construction.
Coat of construction you already know. For cost of land, you have to check the ready recknoer value as on 1.4.2001.
After than you will have to apply indexation to both the value as per the respective years.
Your sale value minus total indexed cost of aqcuistion would be your capital gain.
The cost of acquisition shall be the value of the property as on 1.04.01 which shall be then indexed. Get the valuation done from a registered valuer.
LTCG shall be the sales consideration as reduced by the indexed COA calculated above and the indexed cost of improvement (construction).
Is it mandatory to get the valuation done from a registered Valuer. If not done what is the impact on the same.
Hi,
I understand that there was an ancestral land, on which you constructed a house in 2003-04. You sold the land along with property in 2017.
Calculation of Long Term Capital Gain:
The difference between the sale consideration and the indexed cost of acquisition is the long term capital gain.
Indexed cost of acquisition is the cost of acquisition, multiplied by the cost of inflation index for the year of sale and divided by the cost of inflation index for year of purchase / acquisition. The index for 2017 is 272, while the index for FY 2003-04 is 109.
In your case since the land and building were acquired separately, you will have to calculate both their cost of acquisition separately.
For the land, you will need its value as on 1 April 2001. You can either go to a registered valuer or obtain its value as on that date from the Registrar's Office. The inflation index for the land will be 100.
For the house constructed, you can take Rs. 15 lakhs as the cost of acquisition, provided you are able to substantiate the amount by way of bills or bank withdrawals for the construction, etc.
Trust the above clarifies.
Regards,
Keerthiga Padmanabhan
M.Com., CA, LL.B
It is not mandatory to get the valuation from registered valuer. You can take the stamp duty value of the property as on 1.4.2001.
Hope you have proof for cost of Construction.
Hello,
You may approach the Registrar's office and ask him for the ready reckoner value as on that very date. Carry your agreement along with you to provide him with the necessary details.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, FCA, LLB, CERT. FAFP
