The tax angle to inherited land, building
- Bihar: School director dies after mob assault over death of two students
- PM spoke about Rakhi, but neglected Muslims during 'Ramzan': Congress
- Watch video: CCTV captures Mumbai local ramming into station
- Another Vyapam scam accused dies; 24th death in the case
- Sushma's Ministry declines info under RTI on Lalit Modi's passport issue
The capital gains tax rate will depend on whether the property is short term (ie held for 36 months or less) or long term. For the purpose of computing the holding period, the period of holding by the previous owner is to be included. It will relate back to the last previous owner who had acquired the IP otherwise than as gift or inheritance. If the IP qualifies as long term asset not only the gains are taxed at a lower rate but the benefit of inflating the cost of acquisition (and improvements) for the purpose of inflation is available.
While inheriting IP may be a private family matter, appropriate and detailed documentation could be required to justify your claim for exemptions, period of holding etc. before the tax-authorities.
—The writer is ED, Tax, KPMG