Capital Gain on inherited old house

Respected sir, warm regards, Sir i received one old house through will on date October 2010 by my grandmother which she also received through will in 1994 by my grandfather. i sold this old house in October 2012.Sir is there any capital gain arose , if arose it will be short term or long term. The house is old about 1960s and we have no purchase value record of that time, my grandfather also built 3 rooms in 1985 but we have also no record of that investment, sir how we declare that property,s value and what supporting document we require when filing the return.

asked Jul 22 '13 at 16:49 by Rahul singhania 12


This would be treated under long term capital gains.

In case, purchase value is not known, a fair market value as in April, 1981 would be considered as purchase cost.

Below is an example computation shown for long term gains:

Purchase Year = 1981-82, Purchase Cost = 50000, Cost Inflation Index (CII) for purchase year = 100
Construction Year = 1985-86, Construction Cost = 100000, Cost Inflation Index (CII) for Construction year = 133
Sale Year = 2012-13, Selling price = 5000000, CII for sale year = 852
Indexed Purchase/Construction Cost = 50000 x (852/100) + 100000 x (852/133) = 1066602
Long term capital gain = 5000000 - 1066602 = 3933398

This gain can be shown in ITR-2 return form. No document needs to be attached along with return form. In case IT department needs it, they can demand it later.

answered Jul 23 '13 at 12:05 by Pankaj Batra 5.2k320

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Asked: Jul 22 '13 at 16:49

Seen: 1,474 times

Last updated: Jul 23 '13 at 12:05