Liability on partition of ancestral property

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When relinquishing rights to ancestral property in exchange for money, it's crucial to understand the tax implications. The discussion clarifies that if no formal documentation exists, the money received can be treated as a gift from your brother rather than proceeds from a sale. This simplifies tax reporting, as you don't need to justify the cause of the gift.

Ganapathy Hariharasubramanian

Ganapathy Hariharasubramanian (Querist)

05 April 2020 I relinquished my rights over the ancestral house property to my brother and in turn I received some money. Does this money which comes out of the partition of the house constitute a gift or sale of half portion of the undivided house? What is my tax liability? I have accounted the money received as gift from my brother. Am I correct?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

05 April 2020 Yes you are right it can be treated as gift.

c.bakshi

c.bakshi (Expert)

06 April 2020 if no paper documentation done for receipt of money on any grounds then you can treat as gift

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

07 April 2020 In my view, you have to simply treat the amount received from your brother as gift without linking the same with the partition of HUF property. No need to explain the cause of gift.

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