Apart from our mother, our family comprises of two brothers and a sister. All of us are married and happily settled. My mother is currently living with my younger brother in an apartment owned by my wife. My wife and I are living in our ancestral home, which is now owned by my mother, with our children. My wife has nominated my brother as her nominee for her apartment in the records of her cooperative society. We wish to formalise this arrangement, but also ensure that my mother's interest is fully protected.

My wife is willing to transfer the apartment owned by her to my mother/brother if they will relinquish their interest in the ancestral property.

Please advise us on the best and most economical method to effect this mutually accepted property exchange.

-Hari S Lalkaka, MUMBAIExchange of property is one of the methods that could be adopted. The merit in this is that you pay stamp duties and registration charges only once and secure a registered deed of conveyance. The other method can be for your mother and your brother to severally execute deeds of relinquishment in respect of the ancestral property in favour of you and your wife. Such a deed would be executed on stamp paper of Rs 100 and registered with the Registrar of Assurances at Mumbai.

Pursuant to the execution of this deed, your mother will have to change her nomination in the records of the house-building cooperative society and cancel her nomination in your brother's favour to nominate your wife as her second nominee.

Similarly, your wife, pursuant to the execution of the gift deed in respect of her apartment jointly in your mother and brother's favour, must register the gift deed with the Registrar of Assurances after obtaining prior permission from her cooperative society. The gift deed shall stipulate that the property shall be held jointly during the lifetime of the beneficiaries and shall pass on to the surviving beneficiary only after the demise of the other beneficiary named in the gift deed. Post execution and registration of this gift deed, the society will admit your mother or brother as a member.

If your mother become the member, then she can nominate your brother as her sole nominee.

You also have a third option open to you, which is to transfer both the properties to the envisaged owners through deeds of sale and conveyance.

However, such a method would not be cost-efficient.My father purchased a residential apartment in Calcutta in 1962 for Rs 1,50,000. When he died in 1983, I inherited the apartment.

Post-retirement, I have decided to settle in Delhi. Consequently, I executed an Agreement to Sell with an intended purchaser in April 2000 for an agreed sale price of Rs 40 lakh. Since the transaction involves a clearance under Section 269UC of the Income-Tax Act, it has been stipulated in the agreement that the transaction will be completed within 120 days-by August 31, 2000.

Of the amount due to me, Rs 5 lakh would be paid to me at the time of execution of the Agreement to Sell before the Registrar of Assurances at Alipore, Calcutta, and the balance amount at the time of registration and physical handing over of the apartment.

I submitted my application on form 37(I) to the appropriate authority constituted under Section 269 of the I-Tax Act on May 3, 2000, but I understand that approval under Section 29UC of the Act may not be available till the middle of September 2000. I had simultaneously applied for clearance under Section 230A of the I-Tax Act on Form 34A, but I have been informed by my income-tax assessing authority that he will have to await the outcome of our application on Form 37(I) before issuing the required certificate on Form 34A. It therefore appears that despite my best intentions, transfer of the property will not be possible before mid-October.

At the time of executing the Agreement to Sell, I had planned to invest the entire sale proceeds in infrastructure bonds of NABARD or the Highway Authority of India, with a lock-in period of three years as provided under Section 54EC of the I-Tax Act. However, not a single scheme for tax-saving bonds has been announced by either of these agencies so far. So what are my options if I wish to avoid payment of capital gains tax?

-Prabhat Kumar Mookerji, DELHI CANTTIf your deal was concluded in October 2000, then you have time to make investments in approved instruments under the I-T Act up to March 31, 2001, and I am sure offers from NABARD and the Highway Authority of India under Section 54EC of the I-T Act will be available before the close of the financial year.

If for some reason these options are not available, then you can open a CGAS account before April 1, 2001, with any nationalised bank and park the entire sale proceeds in this account with a view to utilising the funds for either acquisition or construction of a house property.

In the event you are acquiring a ready built house, you can make the investment during the two financial years following the year in which the property was sold-before April 1, 2003. However, if you decide to construct a house, then the time allowed to you is three financial years following the financial year in which you sold the property. The above options are available to you not withstanding the fact that you can always invest in a property within a period of six months from the date of conclusion of your current sale.

You can ward off capital gains tax liability as long as you reinvest the full amount of capital gains that would accrue to you through this sale in either a house or a piece of land. For this purpose, you need to get your sale property valued from an approved valuer to determine its cost as on April 1, 1981. Assuming that the value of property so assessed is Rs 7 lakh, then the indexed cost of acquisition for the year 2000-01, assuming the index number of 410 (this year's cost inflation index is still to be announced), will be Rs 28.70 lakh. Therefore, the quantum of capital gains that should be invested into a new property to avoid payment of capital gains tax of Rs 2.26 lakh will be Rs 11.30 lakh.