Capital Gains

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sai sindura (Querist)

17 March 2018 Sir,Any amount paid to sister or brother against the ancestral property will the capital gains arises in these family arrangements. If it is exempt under which section it is exempt.

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)

17 March 2018 Pls Give more details

sai sindura

sai sindura (Querist)

17 March 2018 Assessee father has expired and amount is paid to sister towards the share in land would this transaction amounts to capital gains or not. Otherwise it has to be consider under family arrangements and exempt if exempt under which section

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)

17 March 2018 After the death of the father, the property becomes the common family property. Any settlement or giving up of ownership by one family member for the benefit of other family member is not considered as a capital asset transfer. Capital gains will not be applicable here

sai sindura

sai sindura (Querist)

17 March 2018 Thank you sir can I know under which section it is not taxable sir

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)

17 March 2018 This transaction is not considered as a Transfer. There is no specific section under which this has been mentioned

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sai sindura

sai sindura (Querist)

17 March 2018 Thank you sir

Nikhil Kaushik

Nikhil Kaushik (Expert)

18 March 2018 everything here will anyway get covered under 56(2)(vii) exemptions

sai sindura

sai sindura (Querist)

18 March 2018 Thank you.

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)

18 March 2018 Nikhil bro, I think this doesnt fall under gift when there is consideration paid.. :)

Nikhil Kaushik

Nikhil Kaushik (Expert)

18 March 2018 actually my mistake. Sai. You can refer to the following cases that cover facts of your case:

1. B.A. Mohota Textile Traders Pvt. Ltd vs. DCIT (Bombay High Court)

2. Commissioner of Income Tax vs. A. L. Ramanathan, 1998 (Madras High Court)

and also refer to this article for detailed discussion on family arrangement related tax issues https://taxguru.in/income-tax/family-arrangements-taxation-legal-aspects.html

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