Hello and welcome to Part 22 of the Income Tax education series brought to you by H&R Block, the global leader in filing Income Tax Returns.
Today we will understand whether you need to pay taxes on inheritance.
The answer is no. You do not need to pay inheritance tax in India. Hence if you inherit property in India then you do not attract any tax liability. Taxability arises on sale of inherited property. You need to pay taxes on capital gains that arise as a result of sale of the inherited property.
Example: Arun inherits an ancestral property from his father valued at Rs.100 crores in march 2015. In this case Arun does not attract any tax liability on this amount. However if and when Arun decides to sell this property, he will earn profits and hence he will be liable to pay capital gains tax on these gains. Suppose his property fetches him a price of Rs. 200 crores and he calculates a capital gain of Rs.50 crores on it then he will have to pay a long term capital gains tax on this amount @ 20% on the amount.
I hope you found this useful. If you have any further questions on this topic, please feel free to ask us using #AskBlock.