ITAT Ruling: Treatment of Long-Term Capital Gains on Sale of Land

The Income Tax Appellate Tribunal (ITAT) in a recent ruling held that in case of partition of ancestral property followed by sale, the period of holding should be computed from the date of acquisition by the predecessor-in-interest and not from the date of partition. This ruling provides clarity on computation of capital gains in such cases. Key Takeaways: - Period of holding to be computed from original acquisition date - Cost of acquisition to be taken as per provisions of Section 49 - Indexation benefit available from the year of acquisition by predecessor This ruling is significant for taxpayers dealing with inherited or partitioned properties.