Property sold for 40 lakhs, do both heirs need to file ITR?

Ans: Income from capital gain is required to be reported in ITR 2. Person earning income from sale of investment is required to provide details of personal property held by him/her in ITR if income is more than 50 lacs during the year.

Ans: Namaste,

I understand your situation and I'll try to provide a simple explanation.

For your mother's case, since she has sold a property and made a long-term capital gain, she will need to file her Income Tax Return (ITR) using Form 2 instead of Sahaj (Form 1). The reason being, Form 1 is for individuals having income from salaries, one house property, other sources (interest etc.) and having total income up to Rs 50 lakh. However, in your mother's case, there is a capital gain involved, so Form 2 is more appropriate.
The sale proceeds of the house will be reported under the head 'Capital Gains'. The purchase value of the plots will be reported as the 'Cost of Acquisition' under the same head. The capital gain tax paid will be reported in the 'Taxes Paid and Verification' section.
As for your case, since you have been made a co-owner of the plots, you should also declare this in your ITR. However, as you have not contributed to the purchase, it will not have any tax implications for you. You can mention it under the 'Asset and Liability' section if your taxable income exceeds Rs 50 lakh.
Please note that this is general advice and the exact details may vary based on the specifics of the transactions. It's always a good idea to consult with a tax advisor or chartered accountant to ensure all details are accurately reported.

Ans: For the income tax purpose, person who make the payment at the time of acquisition of property, is considered as owner. By adding name is agreement, ownership for the income tax purpose will not be decided.

Further to report gain from capital gain, ITR 2 is applicable.

Ans: I offer my opinion on your above questions, point wise as under :
01. First of all refer to the "WILL" of your Father & Mother. Their share should be transferred, in the name of the beneficiary of the WILL, may be you, your wife of anybody else.
02. Till the date of death, your father & mother are entitled to 1/3 RENTAL INCOME EACH.
03. You are supposed to file ITR of your Father & Mother, after their death, till the date they were alive, along with their all other Income, whether from pension or any other source. ITR should be filled by you as their legal heir/representative asessee.
04. Portion of rental income of your wife, shall be continued to be shown in her ITR.
05 When property share of your father & mother is transferred in the name of beneficiaries, they will be responsible to show this income in their ITRs.
06. If there is "REGISTERED WILL" property can be transferred in the name of beneficiary. If there is no "WILL" then the property shall be divided among all legal heirs equally. However, some of the stake holders may opt for having no share in the property.
Most welcome for any further clarifications. Thanks.