Tax implications in relinquishment deed

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Rohit Suryakant Telang (Querist)

22 November 2012 Iam residing in Mumbai in a flat along with my widowed mother.I have one married sister.The flat was in my late fathers name who died without a will.As my sister wants a share in the property,we all decided to make a MOU and Relinquishment Deed in favour of my sister.As per the Relinquishment Deed my sister will pay me Rs.xxxx as my share in the property and my mother will pay me Rs.xxx as her future share of the property.In return I will relinquish my claim on the property including any FD and jwellery of my mother.
Let me make it clear that my sister is not going to register this deed for registrion purposes.
My questions are as follows.
1.If I sign this,what will be the tax implications for me?
2.How can I minimise my tax
3.Can my mother give me her future share now?if yes,will it be taxed separately?
4.Is it a income as per law?,as it is a transfer of property.
5.If I have to pay the tax,how to show it in my annual returns?
Please help me.
Rohit

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)

23 November 2012 1. Relinquishment amounts to transfer as per Section 2(47).

2. Accordingly capital gain shall arise on such relinquishment.

3. To minimize the tax you can invest the sale proceeds in a residential house property and claim exemption u/s 54.

4. The income shall be shown under the head Capital Gains in your return.

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