Extinguishment and relinquishment

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Querist : Anonymous

Querist : Anonymous (Querist)

07 November 2013 what is extinguishment of rights and relinquishment of asset please explain and give some examples..

CA Pallav Singhania

CA Pallav Singhania (Expert)
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07 November 2013 Relinquishment means, to renounce or surrender a possession or right. A relinquishment takes place when the owner of a property abandons his right in the property or withdraws himself from the said property.

For eg. a co-owner of a property having definite and ascertained share relinquishes his share in the property, amounts to transfer and therefore is subject to capital gains taxation. Under relinquishment, though the owner withdraws himself or abandons his rights, the property continues to exist and will become the property of some one else.

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CA Pallav Singhania

CA Pallav Singhania (Expert)
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07 November 2013 extinguishment is the cancellation or destruction of a right, quite often because the time for enforcement has passed. Example: waiting more than four years after the due date to make a demand for payment on a promissory note wipes out the person's right to collect the money owed to him/her.

It can also occur by fulfilling the obligation so no further money or performance is due.

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Querist : Anonymous

Querist : Anonymous (Querist)

11 January 2014 sir, then what is the difference between sale and relinquishment?