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Mihir Tanna |1089 Answers |Ask -Follow

Tax Expert - Answered on Oct 11, 2025

Mihir Ashok Tanna, who works with a well-known chartered accountancy firm in Mumbai, has more than 15 years of experience in direct taxation.
He handles various kinds of matters related to direct tax such as PAN/ TAN application; compliance including ITR, TDS return filing; issuance/ filing of statutory forms like Form 15CB, Form 61A, etc; application u/s 10(46); application for condonation of delay; application for lower/ nil TDS certificate; transfer pricing and study report; advisory/ opinion on direct tax matters; handling various income-tax notices; compounding application on show cause for TDS default; verification of books for TDS/ TCS/ equalisation levy compliance; application for pending income-tax demand and refund; charitable trust taxation and compliance; income-tax scrutiny and CIT(A) for all types of taxpayers including individuals, firms, LLPs, corporates, trusts, non-resident individuals and companies.
He regularly represents clients before the income tax authorities including the commissioner of income tax (appeal).... more

Question by Debasis on Jul 25, 2025Hindi

I have sold some ancestoral property to a promoter. I have invested half of the money in infrastructure bond and I am purchasing a property for the rest of the money and for that I have opened an capital gain account. I have received the sail deed. I believe I do not have to pay any capital gain tax. Is it mandatory to get circle rate 2001 for filing income tax return? Kindly help me.

Ans: If any capital asset (acquired before April 1, 2001) is transferred then assessee has an option to take its cost of acquisition either as fair market value as on April 1, 2001 or its actual cost.

So if you don't have actual cost of property, it is advisable to obtain fair market value

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Financial Planner - Answered on Oct 07, 2022

Question by Anil - Oct 07, 2022Hindi

This is calculated using Cost Inflation Index (CII). In cases where the property is bought before 2001, the IT laws allow you to adopt the fair market value as of 1st April 2001. It may be noted that this fair market value cannot be higher than the circle rate/guidance value as of this date. The CII of 2001-02 is taken as base value of 100 and this value for current FY is 331. The Indexed Cost of Acquisition will thus be = 331/100*(FMV as of 1st April, 2001). If you have spent for any maintenance etc., you can add to this and claim. The capital gain tax will be 20% of the Sale value minus Indexed Cost of Acquisition. Surcharge and Cess will be as applicable on the above tax computation. 3. How to invest this money and in what type of instruments so that tax can be saved?

Ans: You can save tax on the capital gains by investing into different avenues:

a. Purchase or construct another house. New house is purchased one year before or two years after the sale of the old house or new house is constructed within 3 years after the sale of the old house. This new house can’t be sold within 3 years of possession. The cost of new property should be less than the earlier sale amount.

b. You can invest in 54EC bonds to a maximum limit of Rs 50 lakh. You must invest in notified bond within 6 months of sale.

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