Capital gain tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

09 December 2013
A client of mine has received share of his inherited ancestral property in cash.

The share in property (Land) is divided through inventory proceedings in the court in the year 2013 by valuation of land and the same is auctioned among the beneficieries and purchased by one of the beneficieries. the share of my client is paid to him in cash.

Whether capital gain tax is applicable?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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09 December 2013 In my view, the Auction Price so received is sales consideration.
.
The cost of acquisition is, the cost allocable in respect of his share, which had been incurred by the First Ancestor after 1.4.1981,
.
or
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the FMV as on 1.4.1981 in case, when the property was acquired prior to 1.4.1981,
as the case may be.
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Capital Gain Tax is applicable as it amounts to transfer of right in the property. A right is a capital asset.
.