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Buying right in ancestral property from siblings

Tax queries 182 views 1 replies

assessee is planning to buy right in ancestral property after death of parents. His other siblings will be relinquishing their right for consideration. Assessee will sell his other owned properties to raise amount of consideration to be paid to siblings. he will have long term capital gain on sale of these owened properties. 

Will this purchase of share in ancestral property rights by other siblings which will give in single title to ancestral property qualify as investement in residential house u/s 54 of income tax act as exemption from capital gain on sale of his owned properties.

Pl guide. 

Awaiting reply ASAP.

Replies (1)

Yes, When the co-owner release their rights in favour of assessee, its considered as deemed purchase, and over such purchase exemption u/s. 54 can be availed. CIT vs. T.N. Arvinda Reddy (1979) 120 ITR 46/2 taxman 541 (SC)


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