| Question And Answer | |
|---|---|
| Subject: | Taxation on proportionate amount received on sale of family property under application to court for partition. |
| Category: | Income-Tax |
| Querist: | Shivam Kumar |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | Family Arrangement, sale of property |
| Date: | February 23, 2023 |
The assessee has 7 siblings in his family and received property in heritage from his father.
The assessee has a 1/7th share in the property.
Two family members out of seven have made an application for the partition of such property in the court.
The property is sold to another party for consideration and all the family members had received their respective shares in consideration.
Now, whether the amount received by family members is taxable or not?
Also, if taxable then under which head/place it would be shown in ITR?
Also, if not taxable then under which head/place it would be shown in ITR?
The amount received will be taxable under the head Capital Gains. As the property is heritage it is assumed that it was purchased 50 -100 years ago or inherited by the Father. Then the FMV of the heritage property as of 2001 is to be considered and indexed accordingly for the purpose of computing Long term Capital Gains.