• Property sale and capital gains tax

Hello Everyone, The sale of property is going through court system: initially two sisters and one niece, were not agreeing to the sale of the property unanimously. Now eventually they have all agreed, and there is a potential buyer as well. BUT, out of the blue, another person is claiming to be a nephew, and has produced a fake will to the court. There is no objection from anyone for the sale of the property. After the sale of the property, the two sisters will get their share and move on, but the niece’s share will be held in court until court makes a decision regarding the "fake will".

Can you please advise what should the niece do about paying capital gains and/or wealth and/or other due taxes, since she would need the proceeds from the sales to be able to pay such taxes? Is it possible to legally arrange for postponement on paying any due taxes until her inheritance will be released by the court? If not, is it possible to legally arrange to have these taxes taken out of her share of the inheritance that will be held by the court? Please advise.
Asked 2 months ago in Property Law from United States
Religion: Hindu
1) it is not possible to postpone payment of taxes till inheritance amount is released from court 

2) on sale of property niece  has to pay her share of capital gains tax 

Ajay Sethi
Advocate, Mumbai
23408 Answers
1230 Consultations
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1. There will be no capital gain tax to be paid by the nephew since she has not made any investment in the property to ripe the capital gain for paying any tax thereof.

2. Moreover, any tax shall have to be paid after having received the money to one's account or nhand.

3. In the instant case no tax or levy payable in connection with the share of the niece shall have to be paid by the said niece till the share is held with the Court and not deposited with the bank account of the niece.

4. Her liability to pay any such tax arises after her share of the money is  disbursed to her bank account. Not before that.
Krishna Kishore Ganguly
Advocate, Kolkata
12144 Answers
234 Consultations
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How will the court calculate the share of the consenting heirs if the legal claim of the purported nephew is not decided?  The nephew must have sought injunction from the civil court. Consult a lawyer with a copy of pleadings including the impleadment application of the nephew who has set up a will in his favour if you want an unambiguous answer.
Ashish Davessar
Advocate, Jaipur
18275 Answers
451 Consultations
5.0 on 5.0
Can you please advise what should the niece do about paying capital gains and/or wealth and/or other due taxes, since she would need the proceeds from the sales to be able to pay such taxes? Is it possible to legally arrange for postponement on paying any due taxes until her inheritance will be released by the court? If not, is it possible to legally arrange to have these taxes taken out of her share of the inheritance that will be held by the court? Please advise.

As far as paying the capital gains taxes, the niece should get the consideration amount in her hand to establish that she has sold the property and got capital gains.
The consideration amount has been held by the court and yet to be disbursed to her hence practically she has not got the amount, so there is no need to pay any tax on the amount which has not been given to her so far.
Thus your niece should not worry about paying the capital gains tax so soon even before getting her sale consideration amount legally. 
T Kalaiselvan
Advocate, Vellore
14177 Answers
128 Consultations
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Two Answers and they contradict each other. Please help us with our important and urgent situation. I truly appreciate each answer, but it does not help when they contradict each other. You all are the experts here, and I respect your expertise


All the fingers are not alike.
You may choose the answer that suits your situation or if you are still in doubt you may consult a chartered account or an auditor for more proper opinion in this regard.
T Kalaiselvan
Advocate, Vellore
14177 Answers
128 Consultations
5.0 on 5.0
1. In this forum, one expert can not see the advice given by the other experts.

2. Without knowing what are the other advice rendered by other experts, it is not possible to debate or argue in this regard.

3. However, please note that the question of payment of .tax arises after earning/gaining the amount and in the instant case the nephew has not yet got the amount which is with the Court now.
Krishna Kishore Ganguly
Advocate, Kolkata
12144 Answers
234 Consultations
5.0 on 5.0

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