Capital gain

This query is : Resolved

HUKAM SINGH BAGGA (Querist)
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22 July 2013 Dear Sir,

We(My father, brother and I) have a house in the name of my father. Acquisition and construction of the house done ( Ground floor about 50 years before and First floor about 30-35 years before ).Know one know the real cost of the house. Now my father wants to sale the property and want to distribute the sale proceeds in three parts. The sale proceeds is about 1.75 crore.
Please let us know the Tax obligation for each of us.
Thanks

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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22 July 2013 Though it is a house of your all family members, still you can not deny the fact that if your father wish he may not give you
a single paisa out of Rs.(1.75/3) crore.
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The fact is that- this house is in the name of your father and he only will be assessed for capital gains tax until he divides the property by defining the shares and fulfilling the legal requirements. Then only capital gains can be allocated.
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In case all the "deemed owners" are taxed @ 20% ( Total Income above Rs. 5.00 lac) then there is no need for distribution. Better think of purchasing New Residential House.
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In case of the property constructed prior to 1.4.1981, the valuation as on 1.4.1981 is considered as cost and as no body knows in you family -when the upper floors were constructed and how much was spent-let it also take as constructed prior to 1.4.1981.
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Get valuation of the property from an approved valuer.
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