Everything You Need To Know About Inherited Property Taxation Although it is usual in India to inherit property, it is important to understand the Income Tax regulations for such assets in order to be ready for the upcoming financial obligations. Regarding the taxes that apply to inherited property, there is a great deal of misunderstanding in India. It is a prevalent misperception that inherited property is exempt from income tax and that capital gains tax does not apply when an inherited property is sold. The owner of an inherited property is actually subject to annual taxation under the heading "Income from House Property." Additionally, the proceeds from the sale of inherited property are considered Long Term Capital Gains (LTCG), which are subject to a 20% tax.
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Inheritance-related property taxes In India, the Inheritance or Estate Tax was repealed in 1986, and there is currently no tax obligation at the time of inheritance. An owner of inherited property must, nevertheless, pay the yearly tax for "Income from House Property." The foundation on which the tax is computed is either the annual value of the property as determined by the rent received, or a fair rent that the property is anticipated to earn. The annual worth of a self-occupied property is zero, whereas the annual value of a let-out property is the annual rent collected.