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Vivek Lala  | Answer  |Ask -

Tax, MF Expert - Answered on Apr 01, 2024

Vivek Lala has been working as a tax planner since 2018. His expertise lies in making personalised tax budgets and tax forecasts for individuals. As a tax advisor, he takes pride in simplifying tax complications for his clients using simple, easy-to-understand language.
Lala cleared his chartered accountancy exam in 2018 and completed his articleship with Chaturvedi and Shah. ... more
Asked by Anonymous - Mar 30, 2024Hindi
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How to get 2001 guideline value of my flat in Mumbai ?

Ans: Hello, you can get a valuation report for the same from a registered valuer
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |8495 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 06, 2024

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My father bought a property ,about two acres ,within municipal limit in the ear 1959: for rupees five hundred only. The legal heirs are seven. Now the property guide line value is around 800 rupees per square foot for sale registration. More than fifty percent has been occupied by others. The remaining half is in my possession. Local consultants say the purchase price for tax purposes will be the guideline value of the year 2000 and not ?500 . Is it true. Kindly advise.
Ans: Understanding Property Valuation and Tax Implications
Dealing with property inherited from a parent can be complex, especially regarding its valuation and tax implications. I understand your concerns about the property bought by your father in 1959 and its current value for tax purposes. Let's break down the factors involved and clarify the best approach for you and your legal heirs.

Historical Purchase Price vs. Guideline Value
Your father's property was bought for Rs 500 in 1959. However, for tax purposes, especially capital gains tax, the purchase price might be adjusted based on guidelines from the Income Tax Department.

Guideline Value Adjustment:

The purchase price can be recalculated using the guideline value as of a certain base year, which simplifies tax calculations.
Base Year for Property Valuation
Understanding the Base Year Concept:

For properties acquired before 1st April 2001, the base year for calculating capital gains tax is 1st April 2001.

This means you can consider the fair market value of the property as of 1st April 2001 instead of the original purchase price in 1959.

Calculating Fair Market Value as of 1st April 2001
Local Consultant’s Advice:

The consultants suggested using the guideline value of the year 2000, which is correct for determining the property's fair market value as of the base year.
Steps to Calculate:

Determine the guideline value per square foot in 2001 for the property location.

Multiply this value by the property area (in square feet) to get the adjusted purchase price for tax purposes.

Example Calculation
Assume:

Guideline value in 2001: Rs 200 per square foot

Property area: 2 acres = 87,120 square feet

Calculation:

Adjusted purchase price = 87,120 sq ft * Rs 200/sq ft = Rs 1,74,24,000
This adjusted purchase price will be used to calculate capital gains when you sell the property.

Capital Gains Tax Calculation
Types of Capital Gains:

Long-Term Capital Gains (LTCG): Property held for more than 24 months.
Tax Implications:

For LTCG, you need to subtract the indexed cost of acquisition from the sale value.
Indexation Benefit
Indexation Adjusts Purchase Price:

Indexation accounts for inflation, allowing you to adjust the purchase price to current terms.
Example Indexation Calculation:

Indexed cost of acquisition = Adjusted purchase price * (Cost Inflation Index (CII) for the year of sale / CII for the year 2001)
Assume:

Sale year: 2024

CII for 2024: 348

CII for 2001: 100

Calculation:

Indexed cost = Rs 1,74,24,000 * (348/100) = Rs 6,05,43,520
Calculating Capital Gains
Sale Price:

Assume the property sells for Rs 800 per square foot.

Sale value = 87,120 sq ft * Rs 800/sq ft = Rs 6,96,96,000

Capital Gains:

Capital gains = Sale value - Indexed cost

= Rs 6,96,96,000 - Rs 6,05,43,520 = Rs 91,52,480

Tax Payable:

LTCG tax rate is 20%.

Tax = 20% of Rs 91,52,480 = Rs 18,30,496

Steps to Handle the Property
1. Regularization of Possession:

Work on legal regularization of the occupied part to avoid future disputes.
2. Divide Among Heirs:

Divide the property legally among the seven heirs for clarity and ease of sale.
3. Consult Professionals:

Engage a certified financial planner (CFP) for personalized advice.
Important Considerations
Legal Documentation:

Ensure all property documents are updated and legal heirs are recognized.
Market Conditions:

Analyze current market conditions to decide the best time to sell.
Investment of Sale Proceeds:

Plan for reinvestment of sale proceeds to minimize tax and maximize returns.
Professional Guidance
Certified Financial Planner (CFP):

A CFP can help navigate legal, tax, and investment complexities.
Tailored Advice:

Get advice tailored to your family’s financial goals and circumstances.
Conclusion
Using the guideline value of the year 2000 for tax purposes is correct and beneficial. Ensure proper legal documentation and seek professional advice for the best outcomes. This will help in managing the property sale efficiently and optimizing your financial benefits.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner,

www.holisticinvestment.in

..Read more

Ramalingam

Ramalingam Kalirajan  |8495 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on Jun 20, 2024

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I have a flat in mumbai which is used by my cousin for 40 years, how can I get it back
Ans: It’s challenging when a property situation like this arises, especially with family involved. Let's go through the steps to reclaim your flat in Mumbai from your cousin.

Understanding Your Situation
First, let's break down the situation:

Flat in Mumbai: Owned by you.
Occupied by Cousin: For 40 years.
Legal Perspective
Reclaiming your flat involves legal processes. Here are the steps you need to follow:

Property Documents
Ensure all property documents are in your name. You need:

Sale Deed: Confirms ownership.
Property Tax Receipts: Paid in your name.
Electricity Bills: Preferably in your name.
Mutation Certificate: From municipal records.
These documents prove your ownership and are essential for legal proceedings.

Communication with Cousin
Start with a polite but firm conversation. Explain your need for the flat. Family issues can often be resolved without legal action. If your cousin is reasonable, they might agree to vacate amicably.

Legal Notice
If discussions don't work, send a legal notice through a lawyer. This notice should:

State Your Ownership: Clearly mention you own the property.
Request Vacation: Ask your cousin to vacate within a specific period.
Mention Legal Action: Indicate that you will take legal action if they do not comply.
Eviction Suit
If the legal notice is ignored, you need to file an eviction suit. Here’s how:

Hire a Lawyer: Choose a lawyer experienced in property disputes.
File a Suit: The lawyer will draft and file an eviction suit in the appropriate court.
Court Proceedings: Attend court hearings. Present all your property documents and evidence.
Court Order: If the court rules in your favor, your cousin will be legally required to vacate.
Police Assistance
If your cousin refuses to comply with the court order, seek police assistance. Provide them with:

Court Order: Showing the ruling in your favor.
Property Documents: Proving your ownership.
The police can help enforce the court order.

Alternative Solutions
Consider other solutions to avoid lengthy legal battles:

Monetary Settlement: Offer a financial incentive for your cousin to vacate.
Alternative Accommodation: Help them find another place to stay.
Maintaining Family Relations
Legal battles can strain family relationships. Try mediation or family counseling to resolve disputes amicably. Involve neutral family members to mediate.

Conclusion
Reclaiming your flat in Mumbai from your cousin involves a mix of legal steps and family negotiations. Start with communication, followed by legal notice and, if necessary, an eviction suit. Keep all your property documents ready and consider alternative solutions to maintain family harmony.

Best Regards,

K. Ramalingam, MBA, CFP

Chief Financial Planner

www.holisticinvestment.in

..Read more

Latest Questions
Prof Suvasish

Prof Suvasish Mukhopadhyay  |790 Answers  |Ask -

Career Counsellor - Answered on May 22, 2025

Career
My son got 95.299 percetile in jee mains. Didnt appear for advanced as he is preparing fot bits. He got CS business system in Thapar. Whats the best option through csab counselling. Whats the order of preference
Ans: With a JEE Main percentile of 95.2, your son is eligible for admission to several NITs and IIITs through CSAB counselling. His best options would be to prioritize NITs with strong computer science programs, followed by IIITs, and finally, GFTIs. A strong choice would be NITs like NIT Calicut, IIIT Allahabad, or VNIT Nagpur, followed by IIITs with CSE programs like IIITM Gwalior or IIIT Delhi.
Order of Preference for CSAB Counseling:
1. NITs with strong CSE programs:
Consider NIT Calicut, NIT Kurukshetra, SVNIT Surat, and VNIT Nagpur, as these are known for their good placements and infrastructure.
2. IIITs with CSE programs:
IIITs offer specialized computer science programs and are a good option if you're aiming for a career in software development or AI. Consider IIIT Allahabad, IIITM Gwalior, IIIT Delhi.
3. GFTIs (Government Funded Technical Institutes):
These are generally less prestigious than NITs and IIITs, but can still offer a good education. Consider COEP Pune or other GFTIs that have good placement records.
4. Thapar CS Business Systems:
While Thapar is a good institution, it's important to consider whether your son's interests align more with a traditional CS program or a more business-oriented one. He could also consider upgrading to a better CS program through CSAB if possible.
Important Considerations for CSAB Counseling:
Preferences:
Carefully consider your son's interests and career goals when filling out his preferences. Don't just focus on the top-ranked colleges; also consider the specific programs and their faculty.
Cut-offs:
Check the previous year's cut-offs for each college and program to understand the level of competition.
Placements:
Research the placement records of each college and program to see how well graduates are getting jobs.
Infrastructure and Facilities:
Consider the quality of labs, libraries, and other facilities that are available at each college.
Location:
Think about the location of the college and whether it's suitable for your son's needs.
By carefully considering these factors and prioritizing the right choices, your son can maximize his chances of securing a seat in a good engineering program through CSAB counselling.

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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