InvestorQ : What is the tax on the sale of ancestral inherited property?
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What is the tax on the sale of ancestral inherited property?

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12 months ago
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Inherited ancestral properties in India are generally very common and most people are worried about its taxability at the time of sale. There is no tax on the transfer of any ancestral property, in other words, there is no inheritance tax in India. Any tax that is applicable on such property is at the time of sale of that inherited property and not at the time of receipt. It shall be liable to capital gain tax as applicable to other capital assets. In case of properties that are gifted or passed on through a will/inherited the purchase price shall be considered as the actual price for the actual owner.

For example, Mr. X purchased a property in 2010 for Rs. 20 Lacs and died in 2015, in the same year property is transferred to Mr. P, who is the legal heir of X’s property. Mr. P sold the entire property in 2019 for Rs 40 Lacs. The purchase price for the property shall be considered Rs. 20 Lacs, the price in the hands of the actual buyer (Mr. X) and any indexation benefit shall be applicable as general.
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