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Capital gain

15 August 2016

MY FATHER NOT HAVING PANCARD OVER 70 YEARS OF AGE, DUETO RECEIVE MONEY OF RS 4.00 LAKHS ARISING OUT OF LAND SALE CONSIDERATION AS PER HIS MOTHER'S WILL, PLEASE ADVISE WHETHER WE ARE LIABLE TO PAY TAX OR NOT

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CA Harshal Totla (Chartered Accountant) (2229 Points)
Replied 15 August 2016

Section 56(2)(vii) of income tax act, 1961 provides that where an individual receives in any P.Y. from any person , any sum of money without consideration, the aggregate value of which exceeds Rs.50K, the whole of such sum; any immovable property received without consideration the stamp duty value of which exceeds Rs.50K, the stamp duty value of such property shall be taxable under the head Income from other sources.
However, as per proviso to this section, the above provision shall not apply in case where the above sum or property is received by assessee under a will or inheritance.
Hence, no taxability arises.

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177741 Points)
Replied 15 August 2016

One more step to above:

--When you are going to sell the inherited property, at the time of registration PAN no. will be required. So, advisable to obtain PAN during the course.

-- The capital value of the inherited property will be tax-free; but the capital gains arising out of sell, is to be declared, for which filling of ITR would again be advisible, where again PAN is must.

-- If your father do not have any other income, the capital gains would be tax-free, but if ITR not filled, because of the AIR report of Sub-registrar to department, an inquiry may arise for non-filling of ITR, which may be little more difficult task than filling ITR.

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