cpc

complex capital gain tax on flat sale-pls.reply


sir

My brother in law died leaving his mother and my sisteron 2011.my brother in law baught a flat on 2000.nd he married on 2006.after his death 6 months ago. both of them became legal heir of his flat with 50% ownership.my sister bought 50%ownership of mother in law against a payment to her and becomes 100% owner.

now she wants to sell this flat and to buy a plot of land and construct a house near to her paternal house.

my question is that if she sale the flat now and make a new house with this amount does her income will be considered as STGS and she has to pay tax or she can get relief as she will built another  house?

 secondly ,how her income will be classified- 50% of her ownership inherited and 50% was bought.

does her income will be a combination of LTCG for her inherited part  and STCG - for her bought part.

pls. reply me soon.

best rgds.

debasish das


 
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ADVOCATE

QUERY: "does her income will be a combination of LTCG for her inherited part  and STCG - for her bought part."

Reply: Yes, it will be a combination of LTCG for her inherited part  and STCG - for her bought part.

 

QUERY: "if she sale the flat now and make a new house with this amount does her income will be considered as STGS and she has to pay tax or she can get relief as she will built another  house?"

REPLY: She can claim exemption under S.54, in respect of the LTCG portion. The STCG portion will form part of her taxable income.

 
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