Capital gain and income tax return

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Rahul Gupta (Querist)
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23 July 2012 My grandpa property was entrusted to 4 sons and 1daughter (ie my mother) after his death.

The property was sold in oct 2011, total sales value = Rs 100 and me and my sister got the share (1/10 ie 1/5 *1/2 Rs 10 each). As my mother died last year.

Total Sales prices is Rs 100/-.
Index cost Rs 80 each.
Total Gain is 20/- .

My sister and my share out of this gain is Rs 2 each /-.

After indexation our gain is now Rs 2 each. Both of us invested Rs 2 each in 54EC rural bonds within 6 months

I want to file return for year ending mar, 2012.

Now question is : In my income tax return, should I show sales proceed as Rs 100 or Rs 10 (my share). And show index cost accordingly.

Please guide.

CMA Nishad Patkar

CMA Nishad Patkar (Expert)
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24 July 2012
Dear Mr. Rahul,

In my openion capital gain would not be arised in your or your sister's hand. Capital Gain is taxable in hands of your monther. I.e Rs. 20 as she was a owner of peroperty.

In your case money trf. from one person to another person exceeds Rs. 50000 is taxable as receipts without consideration u/s 56(2)(vii.and same is taxable under Income from other sources.
However in your case this income is completely exempt as you have received such sum from your Mother. And hence you and your sister is expempt from tax.

Other Experts can express their view on above.

Rahul Gupta

Rahul Gupta (Querist)
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25 July 2012 Thanks Nishad,

One small clarfication, my mother expired in dec 2010.
This property is sold in oct,11 by all family members.

Ie why we being legal heir, are getting share of sales proceed as Rs 10 each..and capital gain of rs 2 each.

please guide
": In my income tax return, should I show sales proceed as Rs 100 or Rs 10 (my share). And show index cost accordingly"

CMA Nishad Patkar

CMA Nishad Patkar (Expert)
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26 July 2012 In return you can show it as Sale Proceeds of Rs.10 and Index cost of Acquistion on pro-rata basis of share in property and compute accordingly.

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