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Last Updated On 26-Sep-2021
Tax

Capital gain exemption and tax liability over consideration for relinquishment

We are 3 blood sisters nominees in a flat left by my deceased father, without a will in Mumbai. I am acquiring the flat from my sisters by way of relinquishment release deed, also paying them consideration and stamp duty. Now my question is – 1. I have sold another property where I have long-term capital gains. Can I use this money to pay off consideration to my sisters For relinquishment, and get capital gain exemption? 2. Is there any other tax liability over me or my sisters for this set up or otherwise. Please advise.

( Mumbai, Maharashtra )

22-Sep-2021

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A.
Dear Client,
1. Yes, you can use that money to pay off your sisters' consideration for executing a relinquishment deed in your favour, and it will be tax-free up to the amount given to your sisters because it is not a capital gain.
2. You may consult a chartered accountant in your area by presenting your other sources of income.
Thank you!
Posted On 26-Sep-2021
Vidhikarya
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A.Dear Sir,
My answers are as follows:
1. I have sold another property where I have long-term capital gains. Can I use this money to pay off consideration to my sisters For relinquishment, and get capital gain exemption?
Ans: Yes, you can use that amount to pay off consideration of your sisters who are ready to execute relinquishment deed in your favour and it will be exempted to the extent of amount paid to your sisters as it is not your capital gain.

2. Is there any other tax liability over me or my sisters for this set up or otherwise.
Ans: Please check with local chartered accountant by showing your other sources of income.


Posted On 23-Sep-2021
Kishan Dutt Kalaskar
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