10 April 2009
We are 3 brothers & 2 sisters. Our father purchased a ground for Rs.2500 and constructed house in 1977 and in 1995 additionally constructed a floor for Rs. 200000/-. He died in the year 1997 and we demolished the house and constructed 5 apartments in the year 2008 (October). Out of 5, we retained 3 flats for three brothers and sold the two flats to outsiders and utilised the consideration of Rs.2800000/- towards construction of all the 5 flats. Being allotted a small size flat I was compensated in cash to the tune of Rs.300000/-. Pl clarify what is the capital gain tax on my part and if anything has to be paid, what is the last date for payment. - g.ramesh (rameshrohit65@gmail.com)
11 April 2009
The following points should be taken in to consideration while making calculation
1) Indexation benefit and Cost will be on only land cost and the cost of construction by father is not be taken in to consideration as the construction is already demolished
2) The Indexed Cost of Land and current cost of Apartment to be devided proportionatly as per aptt area and this both only should be the total cost of the property
3) To get the Capital gain amount the above cost of only two aptt to be deducted from Sales realisation
4) The above capital gain to be distributed proportionately among the three brothers if the sisters do not have share in father's property
5) The Compensation of Rs. 300000 is to be treated as other income or else to save tax you may show the amount as gift from your brothers by making a gift deed
however if the information as asked earlier will be provided the exact liability can be estimated
Thanx for your reply. Query wise the informaion is as under:
Q.No.1 - The ground was purchased in the year 1972 for Rs. 2500 and construction completed in the year 1977. Though no idea of fair market value on 1.4.1981, I could assume the market value could be Rs. 20000.00. Q.No. 2 - Flat Sizes are : 980, 840, 682, 652, 532. The 980 & 840 sq.ft flats have been allotted to my brothers and I have been allotted 682 sq.ft flat. Flats measuring 652 & 532 sq.fts have been sold to outsiders for a consideration of Rs. 2800000/- Q.No. 3 - Total cost of construction of all the five flats was Rs. 28 lakhs. (individual figures not available) Q.No. 4 - two sisters have shared the jewels worth Rs.130000/- of our mother (who expired in 2007)and the cash of Rs. 54000/- left in pension a/c of mother. They executed release deed in favour of us relinquishing their rights in the property. Q.No. 5 - We (brothers) executed a settlement deed amongst us for allotment of the flats and also payment of cash to me for having been allotted smaller flat.
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