What is the impact of Capital Gains on an individual's estate for inheritance purposes?

In India, Capital Gains can have an impact on an individual's estate for inheritance purposes. When an individual passes away, their assets, including any unrealized Capital Gains, become a part of their estate. The valuation of these assets for the purpose of inheritance tax or wealth tax will typically take into account the fair market value of the assets at the time of the individual's death.

If the assets are subsequently transferred to the heirs or beneficiaries, any Capital Gains that have accrued up until the date of the individual's death are not subject to Capital Gain tax. Instead, the cost basis for the heirs or beneficiaries is reset to the fair market value of the assets at the time of inheritance. This means that if the heirs or beneficiaries later sell the inherited assets, the Capital Gain tax will be calculated based on the difference between the selling price and the fair market value of the assets at the time of inheritance.

It's important to note that the specific rules and regulations regarding inheritance tax and the treatment of Capital Gains in estate planning can vary, and it is advisable to consult with a tax professional or refer to the Indian tax authorities for detailed guidance on the implications of Capital Gains on an individual's estate for inheritance purposes.