we have a family property in name of my grandfather. as now he is not alive and now we are planning to sell off this property.. my father is also expired and i have 4 other uncles and grandmother. so total there are 6 parts of any selling price. we are selling this property in 26 lacs but Jantri(registry) value is 32 lacs.. now my questions are
1) at what amount we will be tax as per capital gain thing? 26 or 32 lacs.. 2) till date we dont have any HUFs so can we all create HUF and get this money in that HUF account? and then how the tax will be on this? 3) in my case officially me and my mother are two stake holders so both will get 2-2 lacs so how it will effect tax wise to us.?
19 January 2012
As regards your First question for the purpose of calculation capital gains the sale consideration would be taken as 32.00 lacs under section 50C of the Act.
Yes as the property was acquired by your ancestors, all legal heir can treat this as HUF Property but this would have effect of enhancing your tax liability as net capital gains would be taxable in single hand whereas if each of you report capital gain individualy may be benefitted of lower tax slab and/or threshhold incomes.
Tax on ccapital gains would be calculated as under :
Sale Consideration-Indexed Cost of Property
Tax is flat 20% on Long Term Capital Gains as in your Case the property was acquired your Grand Father, the same is presumed to be a Long Term Asset.
20 January 2012
1. For LTCG sale value will be consider at Rs. 32 Lacs 2. Property is ancestral and there is no partition, therefore it will be taxed in one hand as a HUF. If there is partion among the members of family before the sale of property, the respective shares will be taxed in respective hands. After partition in case of female and unmarried male members receipt will will be treated as their individual income under LTCG and as income of HUF of respective married male with their family members. For partition of HUF sect. 171 of I Tax Act may be referred. I differs from opinion of Mr. CHUGH, I am of view that each of you can not show income in respective hands as per share untill their is partition of HUF property, as the property is ancestral.
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