Archive · 30 Jul 2026
₹50 Lakh Cash Sale of Inherited Property Sparks Tax Questions
A mother inherited a house from her own mother and sold it to a builder.
The builder paid her ₹50 lakh in cash, and the mother kept the money in a hand‑held envelope.
Tax experts say this sale should be reported as a capital gain on the mother’s tax return.
Because the money was paid in cash, it could raise red flags under Indian tax law, which limits large cash transactions.
To avoid problems, the mother should keep all documents that prove she owned the house and that she sold it, and she must file the correct tax form (ITR‑2).
A mother sold an inherited property for ₹50 lakh in cash to a builder.
The sale was conducted without a banking trail, raising potential tax compliance issues.
Tax experts advise reporting the transaction as a capital gain on ITR‑2, using the original owner's cost basis.
Cash transactions over ₹20,000 are restricted under Section 269SS, and penalties may apply if not properly reported.
Proper documentation, including property deeds and sale agreements, must be retained to substantiate the transaction.
- Who
- A mother who inherited a property and a builder who bought it
- What
- Sale of inherited property for ₹50 lakh in cash
- When
- Within the current financial year (exact date not specified)
- Where
- India
- Why
- Builder insisted on cash payment; mother accepted without banking trail
- Transaction amount
- ₹50 lakh
- Tax reporting form
- ITR‑2
- Tax type
- Capital gains
- Cash transaction limit
- ₹20,000
- Section
- 269SS