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Capital gain on property

Amish Maknojia (Student) (507 Points)

17 August 2020

hi
An owner of property made a will and nominated 2 person and gave them some portion from sale proceeds and other 10 members as mentioned in will shall get the benefits as per will, how will capital gain tax be applicable on the beneficiary and how to calculate?

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6 Replies

SUSHANT BIDAYE (597 Points)
Replied 17 August 2020

The facts are not clear

give a small example with figures which will help in understanding

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Amish Maknojia (Student) (507 Points)
Replied 17 August 2020

Owner Mr.A made a will for the property
nominated Mr.B and Mr.C in that will (as they took care of him)
also it is mentioned to give some portion of sale proceeds of property to some of his relatives (total 10 members) in a proportion mentioned in a will.
so Mr.B and Mr.C will get 10% of sales proceed and rest will be distributed to family members of Mr.A
But, total payment for the proceeds will be first credited to the account of B and C and then they will distribute the amount.
what is the tax treatment in the hands of B and C

SUSHANT BIDAYE (597 Points)
Replied 17 August 2020

My view is as follows.

for B &C it is succession. so capital gains will accrue .

but the amount paid to 10 others will be reduced from sales consideration in the hands of B &C since it is deduction at source as mentioned in will and hence B &C has no option and can't be said as application of income.

the amount received by 10 others could be gift/income from other sources.

this According to me based on pure logic.

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rama krishnan (12239 Points)
Replied 18 August 2020

If b and c and other 10 members fall under the category of relatives to A, then there's no tax implications on receipt of property. even then any property received under a will is exempt. however on sale of property, capital gains will accrue to b, c, and 10 family members too

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Amish Maknojia (Student) (507 Points)
Replied 18 August 2020

@ ramakrishnan B and C are not relatives only 10 other members are relative
and if capital gain is applicable to all the beneficiary then what should be the cost of property, should I take it in proportion to the beneficiary after taking indexation?

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rama krishnan (12239 Points)
Replied 18 August 2020

The indexed cost of acquisition and indexed cost of improvement, if any, required to be taken proportionately in respect of each beneficiary I. e. 1/12 of INDEXED COA per beneficiary