Capital Gain Exemption.

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  1. Anand Mantha

    Anand Mantha Member

    I own a flat jointly(50% each---20L+20L at time of purchsae) with my mother since 2011.The present market value of this flat is 50L.Now we are selling a vacant plot of land,(which is in following names--mother 1/4share,and 3 brothers 1/4 share each---purchased in 1980 for Rs1074 only), for a sale consideration of 1.8 crores. Each one will get 45 lakhs. The capital gain works out to 44 lakhs each,after valuation and indexing.
    I want to claim Capital GainExemption in the following way,under sec 54F:

    I will pay my mother 25 lakhs, and she wil execute a RELEASE /RELINQUISHING deed, transfering her share in the flat, to me. Is it acceptable?(A regular sale deed works out expensive) IF NOT, HOW SHOULD IT BE DONE, to claim CG exemption?. The remaining 19 lakhs, I will invest in REC CG Bonds OR deposit in Cap.Gain Account in a bank.
     
  2. Dear Anand,

    Act doest not said anything about the type of purchase of the new asset. it simply mentioned Purchase of the asset.
    but according to section 2(47):
    transfer, in relation to capital asset, includes:
    (i) the sale, exchange or relinquishment of the asset.
    .............

    by that whenever, your mother relinquishes rights on the property, she will liable to capital gains tax . in that point of view, you will get right thereon means you are purchased the asset.

    you can take some case laws to support
     
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