Capital gain on ancestral property

This query is : Resolved

UNNATI BHOJAK (Querist)
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04 May 2012 Dear Sir,
Good morning, will u please help me for this matter?

my case is like this...

there was an ancestral house property in the name of Mrs. A,which was sold by her in this year for say Rs. 4000000/-. now as per mutual understanding, Mr. B, her son is in receipt of Rs. 700000/-.
Now for this case what would be tax treatment in following options?

1) tax treatment in the hand of Mr. B if he simply deposit into bank account?
2) if he transfers to his son? (tax treatment for son)
3) calculation of capital gain? taxed in whose hands and how much?
4) any other way for proper tax planning??

have a great day

Thanks & Regards,
CA Unnati Bhojak Sharma

Mihir Doshi

Mihir Doshi (Expert)
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04 May 2012 Take the fair market value of 1981 (assuming your ancestral property purchased before 1981 and transferred to you before 1981.

Take the indexation of 1981 = 100 as well indexation of year 2011 = 785 and do the calculation accordingly = Fair market value X 785/100 and deduct the same from your sale amount. You will get the capital gain amount.

Now, you need to invest the amount to buy residential property or to construct new house property with in 2 years or 3 years respectively.

Also you have an option to invest amount upto 50,00,000 in 54EC in NHAI bonds.

Hope query is clear.

Thanks
Mihir Doshi

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