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As a senior citizen who inherited land and sold it, do I need to pay taxes?

Vipul Bhavsar |54 Answers |Ask -Follow

Tax Expert - Answered on Feb 27, 2025

Vipul Bhavsar is a chartered accountant from The Institute of Chartered Accountants of India. He has over 16 years of experience in corporate advisory, taxation and financial reporting.
His interest areas are consulting, income tax, GST and due diligence.
He founded his CA firm, V J Bhavsar and Associates, in 2010 through which he offers services like virtual CFO, trademark registrations, company /LLP formation, MIS reporting, audit, tax and TDS compliances, accounts receivable/payable management and payroll processing.... more

Question by Prasad on Feb 27, 2025Hindi

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I inherited a land property in 1973 through a will executed by my grandma and the said property was only transferred to my name in 2001 after the death of my father. I recently sold that property for 70 lakhs. I am a senior citizen without any source of income of my own and I would like to know what is the tax implications and how should l utilize these funds to reduce any tax burden ...also do I need to file any IT returns ? I lodged all the money in the bank

Ans: Dear Prasad sir,
You shall need to Calculate the Fair Market Value of the property as on 1 Apr 2001. This value shall be your Cost of Acquisition (COA). The difference between the Document Price at which you sold the property and COA shall be Long Term Capital Gain.
If the sale transaction is on or after 23rd July 2024, Long Term Capital Gain shall be taxed either at a rate of 12.5% without indexation benefits or 20% with indexation benefits.
Indeed, exemptions are allowed to you to save on Tax on LTCG, if you invest as follows:

Section 54 - If old asset sold was residential house
New residential house is purchased within 1 yr before or 2 years after the date of sale or constructed within 3 years from date of sale (This house must not be sold within 3 years from date of purchase, if sold entire Tax said saved shall be repayable
Investment amount shall be Long-Term Capital Gain OR Cost of a new asset, whichever lesser

54EC
Purchase of NHAI bonds or RECL bonds, redeemable after 5 years. Maximum sum allowed is Rs.50 Lakhs
Investment to be done within 6 months from date of sale

54F - If old asset was NOT Residential house
New residential house is purchased within 1 yr before or 2 years after the date of sale or constructed within 3 years from date of sale (This house must not be sold within 3 years from date of purchase, if sold entire Tax said saved shall be repayable).
Exemption shall be calculated as Cost of new asset x Capital Gain / Net consideration (maximum up to capital gain)

Kindly consult CA for detailed calculation after verification of documents
Regards,
Vipul Bhavsar
Chartered Accountant

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