Transfer of money from mother to son-Tax implications

Ninad (Service) (52 Points)

01 February 2011  

Hi

A mother a senior citizen sold property in her name and now wants to give the amount of sale proceeds after paying taxes if any to her 2 sons equally so that they can invest this amount in their name . What tax implications do the following have

1. Transfer the amounts by cheque to the individual sons account and the sons use it to buy property. Would this be considered as gift and is there any documentation to follow as the income tax act does not specify any  such documentation

2. Directly issue cheque from her own account to acquire property (flat) in sons name

 

Thanks in advance

Ninad