Request for Advice on Capital Gains and tax planning

This query is : Resolved

K.G.Shah

K.G.Shah (Querist)
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29 July 2024 I am writing to seek your expert advice on a matter related to the sale of a house located at my native place. This house was built by my late father approximately 40 years ago, and I do not have information regarding the cost of acquisition. ( may be 2 lakh ) The sale agreement has been made at a value of ₹30 lakhs.

There are three legal heirs, including myself, and each of us will receive ₹10 lakhs from the sale. The final sale agreement is scheduled to be completed in the second week of August.

As per the latest budget provisions, indexation benefits are available for properties acquired before 2001. I have a few specific questions and concerns that I would like your guidance on:

Fair Market Value (FMV) of 2001: How should I determine the FMV of the property as of 2001? Additionally, I incurred renovation expenses of ₹4 lakhs approximately during 2002 to 2005, for which I do not have any bills.

Calculation of Capital Gains: 1) How do I calculate the capital gains for all three legal heirs?

2) Tax Burden and Legal Options: What will be the tax burden, and what legal options are available to minimize our tax liability?

Transfer of Proceeds to HUF Account: I have a Hindu Undivided Family (HUF) account and would like to transfer my share of ₹10 lakhs to this account. However, the buyer is issuing the cheque in my individual capacity and is not willing to issue it to the HUF account. How can I handle this situation?

I would greatly appreciate your prompt advice on these matters.

Thank you for your assistance.

KG Shah

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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29 July 2024 1 Estimate the market value as on 2001 add renovation expenses.
Calculate capital gains and divide it by three.
2 Tax burden will be minimal.
You can avoid capital gains by purchasing another house.
3 Treat it as HUF income transfer it from individual account to HUF account.