U have a load of questions for one query? no wonder nobody has dared give a reply. - Just joking sir.
Q 1. I think at your age it is better to show the entire sale consideration in the sale deed(stam paper).
Q2. (actually your Q 3) U can subsititute the Fair market value as on 1/4/1981 for this property as the cost since your date of acquisition and improvements are prior to this date. You can get help from some document writers to search up the value in the Registrars office in the same area/Survet No for some document which is registered around April 1981. If it is too difficult, u can add up you rcost (8800+40000+100000) = 148800 It may not make much difference as can be seen below.
Assuming your cost is taken as above, your capital gains is worked out as below
Sale Consideration = 110,00,000
(You can reduce any brokerage paid by you to agents from this amount) let's say 200000
Net Consideration = 108,00,000
Less Cost
Actual Cost == 148800
indexed cost in 2011-12 = 148800 x 754/100 = 11,21,952
Capital Gains 96,78,048
U can invest this in the following manner to avoid tax totally on capital gains. Assuming the sale will be registered in OCtober 2011 but before march 2012.
first deposit the entire sale consideration in a scheduled bank - FD or SB
Invest Rs. 50,00,000/- in NOtified Bonds of Rural Electricfication Corporation or National Highway Authority Limited before March 2012.
Invest Another 46,78,048 in same bonds on any date between 1/4/2012 to the date on which 6 months expire from date of sale. Assuming Slae deed is registered on 15/10/2011 the the last date of investment would be 14/4/2012.
These bonds carry interest of 6.5 to 7 % and have a lock in period of 3 years. i.e u cannot withdraw the money for three years. But No Tax will be deducted from the interest paid to you. After 3 years u can withdraw and use the 96.78 lakhs in any way u wish. Also the cost of 11.21 lakhs as worked above can be used by you in any way from 15th Oct itself.
U will not be liable to pay any tax on Capital gains by above method. As I said even if u subsititute the FMV as on 1/4/1981 a s cost there will be no difference to your tax angle - only benefit would be the amount to be compulsorily invested may reduce a little.
You may note that this particular benefit is available to you only if Sale deed is executed between 1st October and 31st March 0f every year, The reason is the combined effect of the following provisions of income tax law
a. there is a grace period of 6 months for u to invest the mandatory amount for claiming benefit
b. maximum benefit that can be claimed out in this manner is restricted to 50 lakhs per financial year
c the eligible time window in your case falls in two financial years and therefore the benefit for u.
Hope this advice is of help to you in your ripe age which I offer with my respects
CAclubindia
