Please note that the FMV value of the house cannot be lower than the stamp duty valuation or circle rate as is popularly known. On this FMV you have to apply the Cost Inflation Index (CII) to arrive at its indexed cost. The difference between the sale prices and the indexed cost is the long term capital gains.

It seems you all five siblings have inherited this property, so 1/5 of the long term capital gains computed in the manner explained above will become taxable in the hands of each one of you. You have to pay tax at flat rate of 20.80% on such long-term capital gains. You can save the capital gains tax either by investing the long term capital gains for buying or constructing a residential house within prescribed time limits under Section 54 or by investing the long term capital gains in capital gains bonds of REC, NHAI, RFC or PFC within 6 months from the date of sale of the house under Section 54EC.