However, it is not that there will not be any tax liability in all cases due to the rebate available under Section 87A, if your income does not exceed Rs.5 lakh. Since long-term capital gains are taxed at a special flat rate of 20 per cent, irrespective of your income tax slab, you will have to pay tax in case your overall tax liability exceeds the amount of rebate of Rs.12,500 available, and you will have to pay balance tax even if your total taxable income does not exceed Rs.5 lakh. So on Rs 2.25 lakh, i.e., income over your basic exemption of Rs. 2.50 lakh, you have a tax liability of Rs. 45,000 at a rate of 20 per cent, against which you will get a rebate of Rs. 12,500 under section 87A, and will have to pay the balance tax of Rs. 32,500 with cess. It seems you did not pay advance tax, so you will also have to pay interest on the balance tax liability.
Question : My father wants to sell his land, which can fetch around Rs 2 crore. He had inherited the land from my grandfather around 25 years ago. He wants to know how to get money from the sale of the land. Can he put this in a savings account? Will that attract tax? How can he distribute this money among his children?