Comment on Taxation Simplified

SmartTrader commented on 11 Oct 2013, 09:43 AM

Hi OP/TAXIQ, A case of property, please reply as per the facts given below

1) Original Buyer (husband of present owner) bought 4 Katha 10 Lecha land on 04 Sept 1981 for a consideration Amount : Rs 4000
2) On death of original buyer land transferred to his legal heirs-wife (X) & son (Y) on 21.5.2011
3) Sold part of transferred land measuring 1 Katha 5 Lecha on 1 Oct 2013 for an amount Rs 10,00000. This amount paid by cash.

A) What will be the capital gain tax on this amount (10,00000). Whether it will be short term or long term capital gain tax? How is it calculated? Please give the breakup. Please note both wife (senior citizen) and son annual income is 1,50,000 each.
B) Will wife and son have to share the tax equally, as both are now joint holders of the land.
C) Can they save the tax by constructing a new house on the vacant area of existing plot of land. If yes, during construction where should the money be kept (I mean any special account or just normal savings account)? What documents are to be kept as a proof of construction of house? What is the time limit for construction of the house?

Thanx in Advance

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