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Capital gains

prabhaaas (Company Secretary and Cost Accountant) (116 Points)

13 February 2015

QUERY ON CAPITAL GAINS

THE OWNER OF AN INDIVIDUAL HOUSE DIED INTESTATE ( MEANS WITHOUT EXECUTING A VALID WILL ). THE LEGAL HEIRS OF THE PROPERTY – TWO SONS AND WIFE.

AFTER GETTING LEGAL HEIR CERTIFICATE , A POWER OF ATTORNEY WAS EXECUTED IN FAVOUR OF A BUILDER

THE SALE DEED WAS DULY EXECUTED AFTER CANCELLING THE POWER OF ATTORNEY

THE SALE PROCEEDS WAS RECEIVED BY ALL THE THREE LEGAL HEIRS EQUALLY

ARE THE LEGAL HEIRS LIABLE TO CAPITAL GAINS ?

HOW TO CALCULATE CAPITAL GAINS INCIDENCE ON THE LEGAL HEIRS

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3 Replies

Bala Pullaiah B (Salaried) (179 Points)
Replied 14 February 2015

1. It attracts capital gain then

In this question you are mentioning it is individual house (I am taking it as a residential house).

In this case, What they did with the amount received.

1) Invested some other house

2) Building a new house

3) Are putting in to a bank as general deposit

If it is clear we can answer your query.

BBala Pullaiah

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prabhaaas (Company Secretary and Cost Accountant) (116 Points)
Replied 14 February 2015

Dear Sir

Thanks for the reply. The house in question is a residential house. All the three legal heirs , two sons and wife have put the money in a general FD.

Bala Pullaiah B (Salaried) (179 Points)
Replied 14 February 2015

Then they has to pay the capital gain tax. If the value of the house is available, by indexation after considering the development costs, we have to determine the current value of the house and sale value - expenses incurred for sale = is your long term capital gain

On that, you have to pay 20% + 3% cess need to be paid as tax.

If you have any further querty you can ask me on 9994586481