Assuming that your parents are Hindu and on the basis of the facts shared, if an ancestral property is divided, transferred and registered in the name of the parents or successors, then the property transforms in character and becomes the absolute property of the successor. The absolute owners can dispose of the same property in whatever manner they wish. However, since your brother is a class I legal heir, he can stake a claim or challenge your parents’ will.
Q.Recently, my father’s elder brother passed away. His wife is also no more and he had no children. He has left behind a will, making me the executrix for the same. According to the will, everything that belonged to him has to be divided equally among myself, my brother and my cousin, who is the only son of my father’s younger brother. Among the movable properties left behind are shares, mutual funds and cash in bank accounts. Please help us with the following:
1. What is the value that we should consider when we get the shares and mutual funds transferred to our demat accounts? What will be the reckoning date for the valuation, his date of death or the date on which the shares are credited to our respective accounts?
2. In the event of our selling the shares at a later date, how will the capital gains be calculated?
3. Who has to file the income tax return for the income earned by him during the financial year up to the date of his death? As the executrix, is it my duty to file the IT return?— K. Vidya
Here’s how you can make calculations about the property left by your uncle:
1. The value of shares and mutual funds as on the date of death of the testator shall be considered for distributing it equally among the three of you. However, for the purpose of accounting or taxation, the original cost to the testator shall be considered.
2) If you sell any of these shares at a later date, the capital gain shall be calculated as given below:
a) Sale consideration, less the cost of acquisition to the original holder, that is, the testator; less any cost associated with the transfer. The original cost to the testator shall be divided into three parts, to be taken as the cost for each one of you for your computation.
3) Yes, the executrix should file the income tax return as a representative assessee for the income earned by the deceased till the date of his death. All taxes are to be paid out of the estate of the deceased.Disclaimer: The responses are based on limited facts provided by the queries. It is advisable to consult a legal practitioner after presenting full facts and documents. Responses should not be considered as legal advice in any manner whatsoever.