Gift

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This discussion clarifies whether a father can directly pay part of the purchase price for a property gifted to his child. It confirms that payment via bank transfer avoids tax consequences for the gift itself. Furthermore, it establishes that the cost of acquisition for capital gains purposes will be the full property value, regardless of who funded which portion.

srinivasan ak

srinivasan ak (Querist)
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01 February 2021 X an individual wants to purchase a house property. Lets assume the purchase consideration is Rs.20 lakhs. The property has to be registered in X's name.
X' father, from his bank account paid Rs.5 lakh directly to the seller. The remaining Rs.15 Lakh was settled by X from his bank account.
Can X's father pay directly to the seller In order to fit this transaction as a cash gift ?
Will it have any tax consequences?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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02 February 2021 No tax consequences as payment made through bank.

srinivasan ak

srinivasan ak (Querist)
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02 February 2021 Thank you so much sir. One last question,
In the future if X attracts capital gains what will the cost of acquisition of this property?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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02 February 2021 Cost of acquisition will be 20 lacs. Amount paid by father will be considered as gift.

srinivasan ak

srinivasan ak (Querist)
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02 February 2021 Thank you so much for your swift response.

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