Have you sold or thinking to sale the house or shares or any jewellery gifted by your father or any family relative . Maybe you are selling an inherited land or house and now you are concerned about the capital gains tax on the property for which you did not incur any amount. Under Income Tax Act , there are provisions which explicitly applicable to taxation of any gains or loss on sale of such property. In this post , following issues related to sale of gifted or inherited property are explained and simplified through the slide.
Issues on Taxation of Sale of Gifted Property
Following issues are related to the sale of a gifted or inherited or asset received under a will .
[infobox style="alert-success"]1. Which date will be counted to determine whether the asset sold is a short term or long term ? In other words, how the period of holding in hand of seller ( donee) will be determined.
2. What will be the cost of the asset sold in hand of seller who got it free ?
3. Whether indexation of cost allowed in hand of donee?
4. If donor invested on improvement and the donee also investment , will both the improvement cost will be taken for indexation and computation of capital gains ?
5. If the donor himself /herself received the property as gift or inherited , how to compute the cost in hand of person last received the property as gift and the sold the property ? For example ancestral property sale , has this issue.
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