TaxTMI 
TaxTMI 
When an old property (40 years old ) is inherited by the children from the father and after his death the property is sold currently and the proceeds are shared equally between the children, Is the Capital Gains tax is applicable individually for all the children ? How is the tax calculated, if applicable? What is the time limitation ?
Tax calculation - old property
01 Oct 2009 
2 Replies 
1032 Views Asked by
Capital gains on inherited property: sale proceeds taxed individually to each heir; cost basis adjusted to original acquisition value.
Inheritance of an immovable property does not constitute a transfer for capital gains at the time of the decedent's death; on sale, each heir is taxable individually on their share. Where acquisition predates an earlier reference date, heirs may elect a reference valuation and apply indexation to compute indexed cost. If the property is HUF property or if there are family settlements, gifts, or inter se arrangements, the tax incidence may differ and may render the HUF or beneficiaries taxable depending on ownership substance. (AI Summary)
Inheritance of an immovable property does not constitute a transfer for capital gains at the time of the decedent's death; on sale, each heir is taxable individually on their share. Where acquisition predates an earlier reference date, heirs may elect a reference valuation and apply indexation to compute indexed cost. If the property is HUF property or if there are family settlements, gifts, or inter se arrangements, the tax incidence may differ and may render the HUF or beneficiaries taxable depending on ownership substance. (AI Summary)