Tax on land sale,

Dear Pankaj, My mother has inherited property (land) got possession in the year 1984 and planning to sell a portion of land (verbally divided for her daughter) so that she can give funds to her daughter for the construction of house , say the consideration is Rs 40L. My question is 1) Whether the sales of land consideration is tax for mother, 2) If GPA or gift deed is made in her daughter name and she sells the property and funds are utilized for construction of house whether the consideration is taxed. or how to save capital gain tax

Regards Ashok

asked Dec 13 '11 at 22:14 by Ashme22 111


  1. If your mother decides to sell inherited land, she would need to compute long term gains and pay income tax on same.
  2. If your mother first transfers land to your name by a registered gift deed, and then you sell it, capital gains would be applicable to you and income tax would be payable. However as you are getting your own house constructed, you can avail tax benefit u/s 54F. If construction of house is completed within three years of sale of land, with amount more than sale consideration of land, there won't be any income tax payable. You should not be owning more than one house property at the time of constructing new house.

answered Dec 14 '11 at 10:09 by pankaj 5.2k320

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Asked: Dec 13 '11 at 22:14

Seen: 1,473 times

Last updated: Dec 14 '11 at 10:09