income tax on selling ancestor property?



I had an ancestor property which is next to the railway track. I have sold that for lower price than the Muncipality fixed price as there was no buyers. Income Tax department is forcing me to pay tax on Muncipality fixed price. Is there any law or mechanism to get justice.

income tax on selling ancestor property?
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5 Replies to “income tax on selling ancestor property?”

  1. If the house has been kept for more than three years, long term capital gains will arise on sale.

    computation for LTCG and income tax:

    Purchase Year = A
    Purchase Cost = P
    Cost Inflation Index (CII) for purchase year = X

    Sale Year = B
    Selling price = Q
    CII for sale year = Y

    Indexed Purchase price = P x (Y/X) = R
    Long term capital gain = Q – R = S
    Income tax on capital gain = S x 20%

    If the property had been originally purchased before 1.4.1981, then the fair market value as on 1/4/1981 (as certified by an Indian Government Approved Valuer would be considered as cost of that property.


  2. You must approach an Income-tax Consultant (preferably one who has retired from Income-Tax Dept.) and get his advice. I feel you may have to pay the tax as per the Municipal Authorities and then file an appeal with the Income-Tax Appellate Tribunal against the high rate and for refund of the excess amount levied by the Dept.


  3. The income tax department is correct. As per their rules even if you have sold the property for a lesser price than the Govt. price, still you have to pay tax on Govt. rate. Suppose if you have sold and registered the property for a higher price than the Govt. rate, then you have to pay tax on the registered price. That means the The Income tax department will take the sale price for taxation as “Govt. Value or actual sale & registered price which ever is higher”.


  4. Man u need to understand that the possibilities in the cases can be made once a thorough professional knows all the facts and guides you with the procedure.

    Its better for you to involve a professional at the earliest.






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