Income tax on Sale of Housing Property

My friend (Sr.Citizen) sold his old property last year (Feb. 2011) for 20Lacs and do not any record of purchase price and distributed the money (20Lcs) between his wife & sons. He do not any other income and do not have PAN number and not filed any income tax return in past.

  1. How can he pay the income tax on Sale of property?
  2. Can he get general deduction, since do not have any other income?
  3. How much tax he need to pay & how much interest will be charge for late payment of tax

asked Jul 24 '12 at 13:34 by Lalit 123

He would need to compute long term gain on property using below method:
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 purchase price and cost is not known, a fair market value as in April 1981 can be considered as purchase price and purchase year as 1981. For example, if market value of 1 lakh in 1981, gains would be around 13 lakh.

If he does not have any other income he can deduct 2.5 lakh non taxable amount from long term gains and pay 20% income tax on remaining amount.

He need to get PAN card and pay taxes on long term gains.

He would be charged 1% per month each for section 234B and 234C as penalty for late payment.

answered Jul 24 '12 at 13:49 by Pankaj Batra 5.2k320

Thanks Pankaj for your quick reply and support....... god bless you...
(Jul 24 '12 at 13:54) Lalit

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Asked: Jul 24 '12 at 13:34

Seen: 2,029 times

Last updated: Jul 24 '12 at 13:54