Capital gains tax liability of legal heir
A residential property in Delhi in the single name of my mother (father expired in 1991) was sold in April 2013 and the sale proceeds (received through Pay Orders) was deposited in her savings bank account. Me and my younger brother are the only two legal heirs of our mother. Some portion of the sale proceeds received was utilised in purchasing a built up residential property in Delhi in August 2014 in joint name of my mother, my younger brother and brother's wife. Another portion of the 2013 property sale proceeds were utilised in purchasing another builtup residential property in Delhi in April 2014 in the single name of my my mother. Remaining balance of 22 lacs of 2013 property sale proceeds were deposited in a scheme named "DDP-GEN-IND-3 YRS ONLY-INR" of Allahabad Bank in joint name of mother and me (without any nomination) on 31 March 2014 for a period of three years. The bank person told us that this scheme will help us in saving Capital Gains Tax on this invested amount for three years. Unfortunately, mother expired in November 2014. Now, as joint second holder in this scheme, what should I do with this scheme / amount so that this amount is not taxable as capital gains or any other income. Even if I think of buying a small flat or plot of land in my name with this money, will I be able to save capital gains or any other tax on this amount or if I do not invest it in property purchase, can we explain to income tax authorities that this amount should be non - taxable as it is an inherited amount. Or could you please suggest some other way out of this situation? Thanks. Ravi.