tax liability on sale of ancestral property


Hi, We have a ancestral property, bought by my grandfather in 1940's, my father are 3 brothers but my father passed away sometime back and hence my mother is a share holder in this property now. Now the family plans to sell this property and share the amount equally in 3 parts (my 2 uncles and my mother). I want to understand the tax liability for my mother on the amount she receives via this sale. My mother is a housewife and is not working, what will be the tax implications and if she has to pay tax, how can we save maximum? Please guide.    

This property is in the Uttar Pradesh (specifying in case laws differ from state to state)


you may invest the entire amount in capital gain tax free bonds. the amount has to be invested for 5 years and the entire amount will become tax free.


you may call on the below number for any assitance.



Advocate Rohit Dalmia




You shall have to get the property valued and find out the valuation as on 1981. Thereafter you shall get the beneift of indexed cost on the cost of acquisition which shall be deducted from the share recieved by you mother from the sales proceed. The difference shall be treated as long term capital gain and shall be taxed @ 20%.

Assuming that your mother is an Indian citizen, she shall also get the beneift of the basic exemption limt of Rs. 190000/- or 250000/- according to her age.

You could reinvest the amount in a residential property or infrastructure bonds u/s. 54F of the Act and save on tax.

All the best.


Rush*t Sheth.




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