Inherited a 30yr old house but we lost the original purchase papers. How do we calculate LTCG when selling?

Without the original purchase documents to prove the acquisition cost, you lose the ability to claim indexation benefits entirely. This means the tax department could treat the entire sale amount of Rs 1.5Cr as pure capital gains. You would then be forced to pay the applicable LTCG rate, which is currently 12.5%, on the full Rs 1.5Cr rather than just the profit.

India does not levy an inheritance tax when you receive the property, but selling it brings significant tax hurdles if the paperwork is missing. To fix this, your first step is to approach the local municipal corporation where the property is located. Historical property documents are usually preserved in municipal records, and you can apply for certified copies by paying a nominal fee.

If the records are too old and the municipal office cannot find them, ask them to issue an official letter of unavailability. This letter states that the documents cannot be located and serves as a crucial supporting document for tax authorities.

You also need to ensure the property title has been officially updated in the municipal records through a process called mutation. Just transferring ownership at the housing society level by updating the share certificate is not enough for the tax department. Without that official mutation and some proof of the original cost, claiming indexation benefits to lower your tax burden becomes nearly impossible.

Disclaimer: All information shared above are strictly for educational and informational purposes only. It should not be construed as financial or investment advice.