Hey there! I’m a tax consultant and as someone specialising in property taxation, I often get asked, does the sale of inherited property count as income? Well, the sale of an inherited property does not give you an income in its traditional sense. The profit you gain is treated as a ‘capital gain’. So, while the property itself can be a source of income, once you sell it, it becomes taxable under the head capital.
Can I Count Sale of Inherited Property as Income?
No. Let me give you a few facts about tax inheritance and capital gains in the simplest terms,
If you inherited a property in the event of death of a family member, then the income consequently gets transferred to you.
In India, you don’t need to pay taxes just for inheriting.
But when you’re selling the property, you must make a declaration of inheritance on your tax returns.
Here, a capital gains tax applies to the income you generate from the sale. This income is called ‘capital gains’ in legal terms.
Also, the waiting period of the property before selling will help in determining whether the capital gains are short-term or long-term taxes.
So, for immovable properties, long-term capital gains tax applies if you’re selling them after three years.
However, movable assets like bank accounts, lockers and shares have a specific transfer process.
That’s all I have to say here. It’s important to understand that merely inheriting a property is not taxable in India, but when the property is sold, you’re liable to pay the applicable taxes.
You must also ensure the property title is verified before legally transferring ownership. You can take help from the
NoBroker legal team.Hope it clarifies your doubt.
For better understanding, you may also read
Inheritance Tax on Property.
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Does the Sale of Inherited Property Count as Income?
Anuksha
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10 months
2025-03-21T10:17:39+00:00 2025-03-21T10:17:39+00:00Comment
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