LTCG on relinquishment deed

Dear Experts

I've a agricultural land in MP which is currently in my and my mother's name in revenue records.

My grandfather has inherited this land along with other properties from his father during 1940 and was recorded in my grandfather's name in revenue records until 2013 when he passed away interstate. And then this agricultural land got mutated in the name of all the six legal heirs of my grandfather (including my father) in 2014. After which we executed a family partition during which my father also passed away.

This land came in my and mother's name by way of family partition.

Now my mother wants to relinquish her rights in this land in my favour so that i can work independently without making any partnership firm with my mother.

So for computation of LTCG should the cost of the previous owner be taken as the cost of 2001-02 or can we take the cost of 2014 since the land was received by me and my mother from all the joint holders (legal heirs) of the land in 2014 only?

Regards

Kapil

 

 

Replies (1)
1. Agricultural land in a rural area is not a capital asset and hence no capital gains.

2. If the Agricultural land is in an urban area, the relinquishment will lead to capital gains. COA will be the FMV as on 1.4.2001 and indexation benefit will also be from 2001-02.

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