| Question And Answer | |
|---|---|
| Subject: | IN WHOSE RETURN OF INCOME THE SALE OF PROPERTY OF THE DECEASED PERSON TO BE INCLUDED |
| Category: | Income-Tax |
| Querist: | N B K |
| Answered by: | Law Intern |
| Tags: | Capital Gains, cost of acquisition, deceased assessee, return of deceased |
| Date: | August 31, 2025 |
WIFE DIES IN 2022-2023, LEAVING BEHIND HUSBAND, UNMARRIED SON AND DAUGHTER WITH A 50% SHARE IN A RESIDENTIAL PROPERTY WHICH IS BEING SOLD IN 2024-25. BALANCE OF 50% SHARE IS HELD BY THE UNMARRIED SON.
THE PROPERTY WAS PURCHASED IN 2010-2011.
THE SALE PROCEEDS RECEIVED BY LEGAL HEIRS IN PROPORTION TO THEIR SHARE DIRECTLY FROM THE BUYER, SON GOT 66.66%, HUSBAND 16.67 % AND DAUGHTER 16.67% LEGAL HEIRS ARE DECLARED BY THE THASILDAR OFFICE.
NOW THE QUESTION IS HOW TO COMPUTE LONG TERM CAPITAL GAIN AND HOW TO SHOW IN INDIVIDUAL RETURN. IF THE COST OF ACQUISITION IS INDEXED, THERE MAY NOT BE ANY LONG TERM CAPITAL GAINS TAX.
1.WILL IT BE OKAY IF THE SALE PROCEEDS RECEIVED BY THE LEGAL HEIRS IS SHOWN IN THEIR RETURN, DEDUCT THE COST OF ACQUISITION IN THEIR PROPORTION, CONSIDERING THE COST OF ACQUISITION AS BY THE DECEASED, COMPUTING LTCG CONSIDERING INDEXATION BENEFIT AND PAY LTCG TAX IF ANY IS PAYABLE OR
2.THE SAME TO BE SHOWN IN THE DECEASED PERSON RETURN OF INCOME, CALCULATE LONG TERM CAPITAL GAINS AND THE PROCEEDS AS PAYABLE TO THE LEGAL HEIRS.
PLEASE GIVE YOUR VALUABLE ADVICE AND SUGGESTION AS EARLY AS POSSIBLE.
Option 1 is the correct option. As the sale occurred in 2024-25, after the wife’s death in 2022-23, the LTCG must be reported in the legal heirs’ individual returns based on their respective shares in the sale proceeds. You have to use the original cost to the previous owner as your the cost of acquisition and index it from 2010-2011.