Comment on Taxation Simplified

Nithin Kamath commented on 12 Oct 2013, 03:37 AM

There you go:
1) Original Buyer (husband of present owner) bought 4 Katha 10 Lecha land on 04 Sept 1981 for a consideration Amount : Rs 4000

In case the Property is purchased on or before 01.04.1981 the cost of the property or fair value which ever is higher should be taken as cost of the property. In your case the Property is purchased after 01.04.1981 then its Rs 4000

2) On death of original buyer land transferred to his legal heirs-wife (X) & son (Y) on 21.5.2011
On the death of original buyer its inherited to his legal heirs 21.05.2011. In that case though the asset remains long term the indexation will be from 2011-12 financial year only.
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.

You can apportion the total cost to cost of land sold, The amount received is sale consideration for the purpose of capital Gain. It doesn’t make differentiate whether its received cash or cheque.
4. 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
It will be long term gain … For Calculation do visit Some Consultant who can help you with the same.
5. Will wife and son have to share the tax equally, as both are now joint holders of the land.
As per Income and slab, taxes will have to be calculated.
6. 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?
There are various capital gain Schemes, one of them is opening a Capital gain Special account and is not your normal saving account. The Time limit is 3 years to Construct.

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