My father sold his ancestral property in Odisha in Oct 2012. The deal was for Rs. 17.5 lakhs. The purchaser paid Rs. 17.5 lakhs by cheque to my fathers account. The land was in my mothers name. I was not present during the registration and the purchaser made a sale deed for Rs. 3.5 lakhs as per Government prices. My parents were ignorant about the implications.
1. Now since my father received Rs. 17.5 lakhs by cheque, is he supposed to pay capital gain tax even if the sale deed is only for Rs. 3.5 lakhs?
2. If my father invests the money to buy a property in my name in Mumbai, will he be exempted to pay capital gain tax? In such a case should the new property be made in his name.
Sir, what do you mean by "purchaser made a sale deed for Rs. 3.5 lakhs as per Government prices"? Is the sale consideration shown as Rs. 3.5 lakhs or is the stamp duty value based on Rs. 3.5 lakhs.
I suspect it is the latter. Anyway, the capital gains will be computed on the basis of the amount actually received.
As the capital gains will be offered by your father to tax, the investment in the new property should be by him (though you can be added as a nominee)
Since the money has been received by cheque it is beneficial if u calculate capital gain by taking 17.5 lakhs as sale value otherwise it will tantamonut to concealment .
CA MANOJ GUPTA
JODHPUR
09828510543