What is the cost of acquisition in case of gift

Mother purchased the property on 1979

Mother gifted the property to her daughter on 1999 for Rs. 195,000/-

Daughter sold the property on 2012 for Rs. 39,00,000/-

In this case, the cost of acquisition for the daughter shall be the cost of acquisition for the previous owner (mother). The mother is required to determine the market value of the property as on 1-4-1981. 

I am assuming the market value shall be around Rs. 50,000/- as on 1/4/1981. (reverse indexing)

So the computation for LTCG shall be hereunder:

Sale value: Rs. 39,00,000/-

Less Cost of indexation: 426,000/-

Long term capital gain = Rs. 34,74,000/-

Long term capital gain tax = Rs. 707,306/-

Now if the daughter wants to pay Nil tax, she need to invest Rs. 34 lacs in another property or buy infrastructure bonds. She will have to file ITR returns but before that she needs to invest in another property or buy bonds. Gifting the sale proceeds to her son is not an exemption.