• Division of property sale proceeds.

My father-in-law and mother-in-law are joint owners of a property and there are four brothers and sisters. My father-in-law has expired without leaving any will. Mother-in-law wants to sell the property. Now, as I understand, mother-in-law is entitled to 50% of the property and the balance 50% is to be divided equally amongst the four brothers and sisters and also mother-in-law. Now mother-in-law wants to give a portion of her share say 25% equally amongst the four children what is the procedure. Has any gift deed to be made.
Secondly how is the long term capital gain tax to be calculated? To avoid capital gains tax where can I purchase the REC or NHAI bonds. Has mother-in-law only to pay tax or are children also liable to pay tax? How to invest the money received from the sale proceeds if no new house is to be purchased. If there is anything else to be done kindly intime.
Asked 4 years ago in Property Law
Religion: Hindu

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10 Answers


She can transfer her share of property that includes her share from the father as well to all the coparceners by gift. On registration of the property the sale proceed will be taxed in hands of the title holders at the prevailing rate on the indexed cost.

The capital gain should be kept in these venues for the time being but need to be reinvested for the purpose of saving tax by way of investment in the residential property.

Vimlesh Prasad Mishra
Advocate, Lucknow
6848 Answers
23 Consultations

4.9 on 5.0

1) You can distribute your mother in law property among 4 children equally by the way of relinquish deed.

2) first check how much long term capital gain tax you have to pay after you receive your share check accordingly index and when wad property purchased.

3) currently owner who is selling the property has to pay long term property tax. You can ivest in REC or Bonds.

Ganesh Kadam
Advocate, Pune
12338 Answers
191 Consultations

4.9 on 5.0

1)1) on demise of father in law his 50 per cent share in property would devolve on mother in law , their children equally

2) apply for mutation of property in name of legal heirs

3) mother in law can execute gift deed for her share in property

4) if property has been held for more than 2 years sale would attract long term capital gains tax

5)to avoid taxes you can invest capital gains in NHAI or REC bonds

6) consult a local CA

Ajay Sethi
Advocate, Mumbai
87947 Answers
6207 Consultations

5.0 on 5.0


The mother in law can make gift deed of property of her share. You may decide as per your wish regarding investments etc.

Ganesh Singh
Advocate, New Delhi
6646 Answers
16 Consultations

4.5 on 5.0

Dear Sir,

The following principles may be understood which applies to your case.


A hindu woman holds the property as an absolute owner and now she can dispose off the property as her own property. The concept of ancestral property does not apply to a property held by a hindu woman. Your maternal grandmother (naani) can will the property to anyone. However, if she dies intestate (without a will) then the property will devolve as per the rules of succession in Hindu Succession Act, specifically, section 15. In that case, the property goes to the legal heirs of the woman on her father’s side if she received the property from her father’s side and to her husband’s side if she received the property from her husband side.

Kishan Dutt Kalaskar
Advocate, Bangalore
6050 Answers
381 Consultations

4.8 on 5.0

four brothers and sisters? Total 8 or 4

Dalip Singh
Advocate, New Delhi
1040 Answers
36 Consultations

5.0 on 5.0

She can execute a Registered gift deed and transfer the property to you people. To avoid Capital gains the money from the sale proceeds has to be invested within a year. You can't save the capital gain tax without investing the sale proceeds.

Prashant Nayak
Advocate, Mumbai
27275 Answers
88 Consultations

4.4 on 5.0

Dear Client,

Through Registered Release/relinquishment deed, she can give her share to any joint holder.

Sale of property after 3 years of holding attracts Capital Gain Tax.

Capital gains from sale of any long-term asset can be claimed as tax-exempt under Section 54EC of the Income-Tax Act by investing in notified bonds within six months of its transfer

Yogendra Singh Rajawat
Advocate, Jaipur
21481 Answers
31 Consultations

4.4 on 5.0

1. The Mother In law can register Gift Deeds in favour of her children transferring portions of her share of the property to her children the way she decides.. Required stamp duty and registratuion fee shall have to be paid for registering the said gift deeds.

2. there will be no capital gain be it long term or short term in case of your wife's receiving the said gift since she had not invested any capital on which she has derived any gain. It is a gift of property only given by her mother for which no I.Tax shall have to be paid by her.

Krishna Kishore Ganguly
Advocate, Kolkata
26603 Answers
726 Consultations

5.0 on 5.0

This is a jointly owned property and upon the death of a joint owner, the share in respect of the joint owner shall devolve equally on all the class Legal heirs of the deceased joint owner.

Thus the share of property of your deceased father in law shall devolve equally on all his legal heirs consisting of his wife and children.

There is no question of LTCG for the inherited properties, since the property has not been sold for any consideration.

Now coming to your mother in law's own share in the property.

If she wishes to give away 25% share of her property to her four sons alone, she can execute a registered gift deed in favor of all her four sons jointly.

This also will not attract LTCG in your mother in law's hands at this stage.

Hence there is no need to purchase a house out of this income or buy any bonds because this property received as gift from your mother in law by her sons is not after paying any consideration to her.

Dont get confused by misreading the different provisions of law together.

T Kalaiselvan
Advocate, Vellore
78104 Answers
1543 Consultations

5.0 on 5.0

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