capital gain

Deepika Mishra (Querist) 20 April 2011 This query is : Resolved
my father sold a residential property in Indore in March 2011, for 60 lakhs where as the guideline is of 80 lakhs.
the property was made in 1967. How much tax on capital gain he has to pay? He is 92years old.

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R.Ramachandran (Expert) 21 April 2011
Dear Deepika,
Long Term Capital Gains tax has nothing to do with the age of the person concerned.
Capital gain is the difference between the sale proceeds LESS (i)the indexed cost of acquisition and (ii) indexed cost of improvement to the property.
Capital gain tax is payable at the rate of 20% on the capital gain. There are methods whereby the tax can be saved.
Indexation is available only from 1.4.1981. Since in your case the property was acquired in the year 1967 itself, you have to first arrive at the fair market value of the property in the year 1981 and then apply the index. To arrive at the fair market value of the property, you have to approach a Government approved Valuer who will value the property and indicate.

Arun Bhatia (Expert) 28 April 2011
Dear Dipika,
I agree with the views of Mr. R. Ramachandan but i could not understand what is the consideration received whether 60 lacs or 80 lacs

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