After the death of my father, I left my father's house and I am staying in my own flat with my family and my mother. I intend to sell the inherited portion of my father’s house to other co-owners. Will the sale proceeds be taxable? If so, what are the deductions allowed for calculating the tax liability?

Soumendra Kumar Dey, Calcutta

Section 47 of the Income Tax Act states that any transfer of capital asset under a gift or a will does not attract provisions of capital gains tax. In other words, you could not be asked to pay capital gains tax just on account of the fact that your father left behind the family house for you and other co-owners. However, you shall have to pay the capital gains tax when you sell your portion of the inheritance. The calculation of the capital gains tax liability is very tricky in this case because it has to be done depending on in which year your father had bought the property and finding out the inflation indexed cost for your share in the property. Please consult a good chartered accountant. You can, however, avail yourself exemption on the capital gains tax under Section 54 of the Income Tax Act by investing the capital gains in another house property or specified bonds of National Highway Authority, etc.

Account heir

I have a PPF account and I want to include my son as the nominee. The bank officials said only my wife can become a nominee of the PPF account. Can my son be a nominee in my PPF account instead of my wife?

K.K. Nandi, Calcutta

A PPF account holder can nominate one or more persons. The amount will be paid to the nominee or legal heir before the end of 15 years in the case of death of the account holder. It is normally recommended to open a savings account in the name of the nominee or nominees in the same bank and mention the PPF account number in the opening form. In the case of more than one nominee, a joint account may be opened. Else, you can also open a separate PPF account in your son’s name if he is a minor.

If you have any queries about investing or taxes or a high-cost purchase you are planning, mail to: btgraph@abpmail.com, or write to: Business Telegraph, 6 Prafulla Sarkar Street, Calcutta 700 001.