Capital gains tax on a property inherited from grandmother

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suresh chettariyil (Querist)
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15 November 2012
Dear Sir,

My wives grandmother has a property in which there are legal heirs 9 persons. Of these nine persons My wife and her 2 sisters wants to sell of their portion of the property . The sale of their portion of the property is being done by signing of all the 9 legal heirs at the register office.

My wife and her two sisters will get Rs.700000/- each as their share of the property. ( Rs.2100000/- divided in to three) Will this amount attract Capital gains tax in the hands of the three individuals. This is not an asset accuired by them . They do not have any other immovable asset with them and they are going to utilise this money for buying a residence for them in chennai. Kindly enlighten me about the provisions of capital gains tax in this issue . With kind regards Suresh.C

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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22 November 2012 1. The share in the property is a capital asset and accordingly capital gain shall arise on transfer of such share.

2. Since the amount will be utilised for purchasing a residential house property they can claim exemption u/s 54.

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