Cash received as gift from sale of mothers house in accout

Gross LTCG =      34,34,000 (after applying inflation index)

less : section 54 exemption (your investment in another house)= 30,00,000

less : section 54EC exemption    = 4,34,000

Net LTCG =         Nil

tax payable = nil

For exemption under seciton 54EC you will have to purchase capital gains account scheme which are basically bonds of NHAI and RECL which pay interest @ 6% p.a. You cannot sell the house or the bonds for a period of 3 years to avail the exemptions. In case you do sell them before 3 years the amount will become taxable again.

After those 3 years that money can be transferred by your mother to you which wont be taxable under section 56(2).

I Hope i am correct and it helps you.

I have assumed that you wont be disclosing the 13 lakhs received as cash payment and the selling price was 67 lakhs (80lakhs - 13 Lakhs)

P.S. You have mentioned there was re development that took place. If that payment was made with a receipt then that can also be used to decrease LTCG. Disclose complete costs incurred

As per the data given by you, there is no LTCG since you have already invested the required amount in another property. Your mother will have to file ITR for the FY 2015-16 and show the capital gain workings.

Thereafter, your mother may prepare a gift deed and transfer the balance amount in your bank.

Thanks for your reply Gentlemen. If my mother buys another Property, Primary name hers And Second name me and my Wife, Will that also work>