Topic: Is there a way by which we can plan and reduce our tax liability?

There is an ancestral property which is in my fathers name which we intend to transfer, the proceeds shall be divided between me and my two elder brothers equally. We don’t intend to purchase any other property to claim tax exemption of the gains that shall accrue however the option to Invest Rs.50 lakhs in REC bonds seems fine ( I’ve heard that one can invest maximum Rs 50 lakhs in bonds of NHAI / REC under section 54EC). Since the gains that shall accrue on the property shall be close to 165 lakhs and by investing Rs.50 lakhs we shall still have to pay tax on the rest.

Well definitely in the present situation reduce your tax liability. Since the proceeds are eventually to be divided between you and your brothers what can be done is that before the property is disposed of it can first be transferred from your father to you and your brothers (in equal proportion ) this shall have no tax consequences. And later you and your brothers can dispose the property as intended. By doing so capital gains shall be computed separately your and your brother’s hands and each one of you shall be eligible for separate deduction of Rs.50 lakhs by investing in REC/NHAI bonds.

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