Capital gains bonds investment in the name of deceased

Tax queries 205 views 4 replies

Dhanan Rao

5 Points Joined February 2018

My mother sold a flat for rs50 lakhs on 16th Nov 2017. She died in Jan 2018 without investing in capital gains bonds to save tax. I am the legal heir.

I am aware that it is still possible for me to invest in the bonds as the 6 month period is still not over.

My query is will the bonds be invested in my name?(most likely)
If so will it overlap with my rs50 lakh capital gains bonds limit per year?(I sold another property in my name and need to invest in capital gains bonds of Rs 50 lakhs as my capital gains are more than 50lakhs.)

So is it possible to save capital gains for both my property and my mother's property, or am I eligible to invest only in a combined limit of Rs 50 lakhs for both properties?

Final question....FM has announced that capital gains bonds tenure will be increased to 5 years from the current 3 years. Will the tenure increase immediately from 2nd Feb 18 or only after the finance bill is passed by the parliament or from 1st April 2018?

Thanks

Dhananjay

Replies (4)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

210505 Points Joined July 2016

1. Limit is 50 lakhs per PAN per year.

2. The amendment shall be applicable from 01.04.2018 (subject to President's assent)

Dhanan Rao

5 Points Joined February 2018

Thank you sir for the response. So it is then possible for me to invest for my property before 1st April 2018, and my mother's property after 1st April 2018, in bonds to save ltcg. Am I correct?

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

210505 Points Joined July 2016


	So it is then possible for me to invest for my property before 1st April 2018, and my mother's property after 1st April 2018, in bonds to save ltcg. Am I correct?

Under section 159 of the Income-tax Act, 1961 (the Act) it has been provided that where a person dies, his legal representative shall be liable to pay any sum which the deceased would have been liable to pay if he had not died, in the like manner and to the same extent as the deceased.

Simultaneously, section 168 of the Act provides that the estate of a deceased person shall be chargeable to tax in the hands of the executors:

(a) if there is only one executor, then, as if the executor were an individual; or
(b) if there are more executors than one, then, as if the executors were an association of persons (AOP). In this regard any income of the estate of that previous year distributed to or applied to the benefit of any specific legatee of the estate during that previous year is to be excluded from the income of the Estate but included in the hands of the legatee.

it will be clear from these two sections that two assessments have to be made in the year of death. One assessment would be upto the date of death in the hands of the legal representative and the other would be under section 168 in the hands of the executor or executors.

Here, you can claim the benefit in the same year, provided the investment in CG bonds can be purchased as legal representative.

Investment in two years for gains arising in single year is rather not eligible.

Dhanan Rao

5 Points Joined February 2018

Originally posted by : Dhirajlal Rambhia
	Here, you can claim the benefit in the same year, provided the investment in CG bonds can be purchased as legal representative.

Sir, how does one purchase CG bonds as legal representative? It appears I can purchase only in my name, and then explain to the IT officer that I have purchased on behalf of the deceased person as legal heir. Will that be accepted by them? Please clarify.