LIVE GST Certification Course by CA Arun Chhajer begins 27th April. Register Now!!

Tax on land transaction

28 June 2016

My uncle has sold land. My mom name was included as a part of the family member.
she is tax payer and equal share of money received was credited to her bank account as a part of sale process.
my mom transferred all mony she got as a part of the transaction , to his brother as she does not want to keep this money.

my question here is , does she need to pay tax for money received but she does not handle in her account currently? How to avoid paying tax here ?

thanks in advance for help

Reply
Follow
Share

4 Replies

Shishir Nayak ((Expert)) (369 Points)
Replied 28 June 2016

Tax Evasion is illegal in India. So I would suggest you to come forward and be a responsible Indian and pay the required Tax. Don't take it personal. :::::::: Now your answer, you have not mentioned amount received by your mother so I assume it is more than Basic exemption limit. If so , then she has to pay Capital gain Tax as she is one of the owner of Land which was sold. But she can avail exemption under various section of IT Act by investing such capital gain.

CMA Poornima Madhava (CMA) (13097 Points)
Replied 28 June 2016

It is not relevant whether your mom wants to keep money with her or give it to her brother. Since it is her income, she is required to pay tax. As already said by Shishir, she can claim certain exemptions from capital gain based on investment subject to conditions specified.

CA Harshal Totla (Chartered Accountant) (2229 Points)
Replied 28 June 2016

You have two options in this case either pay capital gains tax on the amount of gain accrued to your mother (whether it is short term or long term not clarified by you) or claim exemption from capital gains tax by investing the proceeds in a new house as per provisions of section 54 or invest in notified bonds of NHAI or REC u/s 54EC within 6 months of transfer. capital gains amount should be deposited in a bank account under capital gains scheme if not invested in the said assets before the due date of filing return.

G.L. DASH (SELF) (82 Points)
Replied 28 June 2016

Here practice followed is not good instead receiving share of income, she could transfer share to her brother(relative) for nil consideration or as gift and in such way tax liability is shifted to your uncle

But Here diverting share of income doesnt change assessee so tax will be calculated as per normal provs on share of income