Capital Gain

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 June 2010 We have sold a residential House Property in April 2011. This property was acquired by our grand father in 1952. He died interstate in 1974.
Now the issue is the cost of acquisation. Since the guideline values in our city is available only after 1986, its difficult to get precise value of COA.
As per the trend in city, the sale of similar property around 1981 is taken as the bench mark cost for 1981.
I think, if we take the guideline value of 1986, that shall be more authentic.
kindly suggest an amicable solution on the above and further guide as to whether the entire gain shall be distributed between my grandmother and his children in equal share.
one more question in continuation of it. From her share, my grand mother gift some amount to me. Can it be treated as diversion of income and taxed in my hands or will it remain application of income only.
and can some share of sale consideration be passed legally passed on to grand children and taxed in there hand

Manek Amit

Manek Amit (Expert)
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14 June 2010 First I think you have sold the residential property in April 2010 and not in April 2011.

In particular case Cost of Acquisition will be considered as cost to previous owner but as previous owner has purchased the property prior to 1981. Cost of Acquisition will be Market value as on 1981 or Cost whichever is higher.

Now indexation will be applicable from 1981 only.

Capital will be taxable in the hands of heirs of your grandfather fully.

If you grandmother gifts you any amount from that income then that is fully exempted from tax. Gift received in excess of Rs. 50,000 is taxable but if it is received from relative then there is an exception so nothing is taxable to you.