Calculation of capital gains from property sale

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

25 April 2016 Hi,
I have made a property sale that was inherited from my Grandfather. The property was acquired in 1957 and the sale happened in 2016. The sale of the property happened for 20 lakhs which is less than the market value of the property which is assessed to be 26 lakhs as on date in 2016.
Since the property dates before 1-Apr, 1981, I am therefore assuming that the cost of acquisition is more than the sale price (based on the above mentioned figures) and hence there should be no Capital Gains on the Sale.
Please give your opinion if this is correct understanding.

Regards

Kaushik Joshi

Kaushik Joshi (Expert)
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26 April 2016 Dear Anonymous, do not assume that older the property, no Capital gain. you will have to take a valuation report as on 1/4/81 for determining cost of acquisition. also while computing, sale value shall be considered 26 L not 20 L. I'd suggest you to take professional advise from a chartered accountant and not to take it lightly. saving some money now is not worth the hassle which may arise later.

Querist : Anonymous

Querist : Anonymous (Querist)

26 April 2016 @Kaushik Joshi - Thanks Sir for your reply and advice. I fully agree with you. Just for my information - I want to also understand that if the market value of the property is presently assessed as 26L by the Registration office, is it then correct to estimate that the FMV of the property as on 01-Apr-1981 will be 26L / Cost of Indexation for the year-2016? If my previously mentioned understanding is correct, then the cost of acquisition of the property will be more than the sale price in this case. Your opinion?

Also, can you make me aware if there any professional CA service available online?

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Kaushik Joshi

Kaushik Joshi (Expert)
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26 April 2016 Dear Anonymous, No, you cannot value the cost of acquisition based on the method you'd suggested. The valuer values the property based on the sale deals done in the area during 1/4/81. Hence I suggest you take a valuation report from a registered valuer. Regarding CA Services, we do provide online services but at a fee. for further details I'd recommend you kindly contact us at kjoshitax@gmail.com please note this is my email ID and no where related to caclubindia.