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Relinquishment of rights in ancestral property

Sandeep (student) (216 Points)

12 June 2014

Due to death of both my father and grandfsther in my family, All my aunts{my bhuwa} requested me to get Relinquishment Deed,By which they Loose Right to claim any Financial Interest, in my ancestral property My Query 1.Is Relinquish of Rights of ancestral property Attract Capital Gains?? 2.Should relinquishment deed be REGISTERED compulsory as i am now PLANNING TO GIVE it on RENT?? pls note-no consideration is involved

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7 Replies

JAINENDRA JAIN (ACS/CA) (1668 Points)
Replied 12 June 2014

Relinquishment of right is transfer of capital assets. Moreover when consideration paid cannot be calculated than reference to sec 50d is necessary for computing consideration as fmv of the assets for the purpose of computing capital gains under this act. please wait for what others too say and than act accordingly.

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Sandeep (student) (216 Points)
Replied 12 June 2014

Sir, i want to avoid both capital gains(if applicable) and also stamp duty because the amount is running out of my reach..suggest your view experts

Mihir (Wealth Manager) (5293 Points)
Replied 13 June 2014

Better to prepare gift deed instead. But gift of immovable property needs to be stamped and registered. You do not have to pay tax on this transfer. But tomorrow if you sell this property, there will be long term capital gains in your hand.

Sandeep (student) (216 Points)
Replied 14 June 2014

Is it compulsory stamped and registered?

Mihir (Wealth Manager) (5293 Points)
Replied 14 June 2014

Yes, gift deed of immovable property has to be stamped and registered.

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Nikhil Krishna (Others) (38 Points)
Replied 31 July 2015

Hi Sir. Say in this case property is relinquished by all aunts (and other heirs) to grandson, and grandson decides to sell in within 3 months of relinquished date, then will the capital gains be termed as short term or long term ? [Assume the original owner - grandfather acquired this property in 1980s.]

raghavan (self) (611 Points)
Replied 31 July 2015

U can get release deed registered and there is no tax involved in relinquish ment. But the cost of asset is the purchase.price of ancestor's after 1980 else take value as 1980. It is only long term gain and no stcg is applicable.