Capital Gains on inherited Property

Transfer, in relation to a capital asset, include sale, exchange or relinquishment of the asset or the extinguishment of any rights therein or the compulsory acquisition thereof under any law [sec.2(47)].

Hence, liable to pay capital gain tax.

I agree with Kamal.

yes he has to pay tax for the capital gain arrising from the property sale, even though it is being sold to his brother. for the other party, he can invest the proceed as per sec 54

unless the receipent does not execute an instrument of registration for undivided portion of property, in favor of payee for the consideration received, capital gain does not arise. 

it is the case of division in the family. there shall be mutual consent between A & B and the sale is affected with a Sale Deed, then only Capital Gain Chapter be applicable.......

Thanks all for your reply. I have to further ask that whether A can invest in Commercial Property or he have to invest in bonds or residential property only?????

Pls reply asap.

regards

Girish Chobdar

First thing.. There should be a proper agreement between A and B.. Secondly. Since they are Brothers why cant they take benefit of Gift TAx provisions where in 50000 can be given as gift and still remain Exempt from TAx.. For the remaining amount cost of acquisition will be Nil and CG TAx will come on the entire sale consideration.. This money can be invested and claim exmption u/s 54. 

Thanks again for all the Replies/ Suggestions. Want to Further Ask that 

What will be the Cost of Acquisition??

As said above if the Agreement is not executed then Capital Gain will not Arise. Then What will be the Amount recd be. a Income ? Will the Consideration Recd be taxed

Kindly guide