My brother purchased a piece of land in Assam in October 1983 which he gifted me by a deed in August 2010. I sold the same piece of land in March 2024. The stamp duty fair price is about Rs 1,40,00,000. Will this transaction attract Capital Gain Tax? How can I myself calculate the LTCG if such a situation presents itself?

Ans: Yes, in this scenario, you will likely incur capital gains tax when you sell the land.

Here's why:

• Gifts are exempt from receiving taxes: When your brother gifted you the land in 2010, you weren't liable to pay any tax on receiving it.
• Tax on sale of gifted property: However, when you sell the property you received as a gift, capital gains tax applies to the profit earned on the sale.

Calculating Long Term Capital Gains (LTCG):

Since your brother purchased the land in 1983 and you sold it in 2024, it qualifies as a long-term capital gain (LTCG) assuming you held the property for more than 2 years.

Here's a simplified formula to estimate the LTCG (consult a tax advisor for the exact calculation):

• LTCG = Sale Price - Indexed Acquisition Cost
• Sale Price: Rs 1,40,00,000 (Given)
• Acquisition Cost: Rs 0 (Gifts typically have an acquisition cost of Rs 0)
• Indexed Acquisition Cost: Acquisition Cost * (Current Year Index / Acquisition Year Index)

Indexation Benefit:

• Indexation helps adjust the acquisition cost for inflation, reducing your tax burden.
• You'll need the official government published ‘Base Year Index’ for 1983 and 2024 to calculate the indexed acquisition cost.

Example (using hypothetical index values):

Let's assume (for calculation purposes only) the base year indices are:

• 1983: 100
• 2024: 630 (This is a hypothetical value, you'll need the actual index for 2024)
• Indexed Acquisition Cost = Rs 0 (Acquisition Cost) * (630 / 100) = Rs 0
• LTCG = Rs 1,40,00,000 (Sale Price) - Rs 0 (Indexed Acquisition Cost) = Rs 1,40,00,000

Tax on LTCG:

LTCG on land is currently taxed at 20% with indexation benefit.

In this example (assuming the above index values), your LTCG tax would be Rs 1,40,00,000 * 20% = Rs 28,00,000

Disclaimer:

This is a simplified explanation for illustration purposes only. Consulting a qualified tax advisor is recommended for accurate tax calculations and to consider any specific aspects of your situation. They can guide you through the intricacies of property tax laws, exemptions, and filing requirements.