08 March 2010
dear sir/ma'am please ans my query relating to house property... mr x is an govt employee he under a govt housing scheme was alloted a house in 1985..mr x gave it to his relative who in his name filled all the installemnts..his relative put that house on rent from 1988 & up till now it is on rent...however the registry of that house is yet to be done..on the other hand mr x has his own(2nd house) house in which he his now residing all the legal formalities of which had been completed on possession in 2000. ...now his relative want to register that house in his own name then want to sell it to 3rd party...now my que is what can be the income tax dep reaction against mr x n his relative??
As per my opinion, Mr. X must show rent received from 1988. But now it is not possible to show it, so do not disclose this fact to income tax department and say that house was vacant. Now for current F.Y. you show as rent received and also transfer this house to Mr. relative and compute capital gain tax.
The second solution is that show this property as gift to relative and executive gift aid deed on 1988 Rs.100 stamp paper. But first check out whether it is come under relative definition as per Income tax act.
CAclubindia
