Capital Gains Tax on sale of land

Question

My mother had in 1995 purchased a plot in Bangalore for Rs 1 lacs. We are looking to sell land for Rs. 30,00,000/-.

My mother is approx 55 - 59 years old.

Please inform if we need to pay income tax.

Also if my mother divides the property amount into 3 equal amount (son, daughter, parents); whether they also need to pay tax.

Is there a way this tax can be exempt? We are very poor and trying to sell land for marriage of my 2 siblings. If we are going to gift the amount for my sister and their 2 daughters for the purpose of marriage, is there benefit on income tax?

Answer 1

Please inform if we need to pay income tax.

Yes you mother will need to pay tax on profit [29 lacs]. Currently the long term capital gains is at 10% without indexation and 20% with indexation benefit. You can consult a CA to determine which is best.

Also if my mother divides the property amount into 3 equal amount (son, daughter, parents); whether they also need to pay tax.
Is there a way this tax can be exempt? We are very poor and trying to sell land for marriage of my 2 siblings. If we are going to gift the amount for my sister and their 2 daughters for the purpose of marriage, is there benefit on income tax?

After you mother pays tax, she can gift the money to close relatives [children, parents, sister, nephew, etc] There is no tax applicable to them on this funds.

Is there a way this tax can be exempt?

The only exemption currently available is you mother needs to buy another house/land.