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ghanshyam hemdev (director)     02 September 2014

Capital gains on inherited property

I have inherited a part share in the property of my mother who died some years back.
The property has now been sold and I have received the share of the proceeds from the executors of the will.
I am one of the inheritors along with my brother and sisters. 
The executors of the will have given me my share deducting 20% of the proceeds as hold back to pay for the capital gains tax.
On receiving the money I immediately bought another flat in Mumbai of the same value of my inheritance.
I also own one more flat in Mumbai in my name, which I am occupying.
Now the question is that I require a letter from my I.T.officer that I am not liable to any capital gains tax and only then the executors of the will  will release my balance money, which they held back.
We need an opinion on whether I require to pay any capital gains tax or not and what is the procedure for me to apply to get this certificate from my I.T. officer.
Are they any case laws in a similar case that I can follow?.

 1 Replies

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 )     08 September 2014

Under section 54 the seller of the property can claim for tax exemption; to avail the benefits seller must use entire profit (capital gain) to buy another house. The seller has two options, either he can buy another house within two year from sale of property else he can build a house in three years. Buyer can also buy a house 1 year prior to selling the house and still can avail the benefit under section 54

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