16 October 2013
one of my client has sold his home for some amt, that home was belongs to this clinets forfather say around of 1968. now how will we determine cost of such home on 1.4.1981?
17 October 2013
If the property is purchased before 1981-82 then the FMV of the Property on 1981-82 will be considered as cost of acquisition and the indexation will be taken from date too {If the property isn't gifted after 1981-82..
17 October 2013
If you became the owner of the property before 1 April 1981, then you have the option choosing between fair market value or the actual cost to the previous owner (your father or your grand father) as the cost of the asset. However, if you became the owner after 1 April 1981, then FMV as on 1 April 1981 shall be considered as the cost of the house.
You may appoint a professional valuer to value the property. Thereon you may claim indexation benefit to arrive at the current cost of the house.
the difference between indexed cost and the sale receipt shall be your long term capital gains which is taxable at 20.60%.
You shall have the option of claiming exemption under Section 54 and 54EC.