Capital Gains on Inherited Property of NRI

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 September 2010 I have an NRI client, who has inherited a property located at Maninagar, Ahmedabad along with her sister on her mother's death. The property is a bungalow constructed by her father and his brother way back in 1969 for say, Rs. 40,000/-. If the same is to be sold by her in the current year, how do we work out the cost of acquisition? Whether her being an NRI would depend on whether she recieves the compensation in India or outside?

k c joseph varghese

k c joseph varghese (Expert)
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05 September 2010 in the case of inherited property the date of acquisition to be reckoned as that of the previous owner, ie the mother. so it is a long term capital asset and indexation facility also may be availed.you can substitute the market value of the propery as on 01-04-81 and the index it by 771/100 to ascertain the indexed cost of acquisition and the calculate the long term capital gain. if you dont go in for any investment linked exemptions under section 54, 54F,54EC etc the gain has to be taxed at a flat rate of 20%. the property being in India it has to be taxed here only and the status of NRI is not of any help.

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