Income from building
This query is : Resolved
naveen kumar
(Querist)
08 February 2014
sir,
one of our client have bought a building(registered in his name) of 4 floors and he is getting an annual rent of Rs 15,00,000/-. To reduce the tax liability he decide to give one - one floor to his 4 sons by sinning the MOU . Does the MOU needs to be registered ??? is any provision is there like this??? or any other better ways to reduce tax liablity
one of our client have bought a building(registered in his name) of 4 floors and he is getting an annual rent of Rs 15,00,000/-. To reduce the tax liability he decide to give one - one floor to his 4 sons by sinning the MOU . Does the MOU needs to be registered ??? is any provision is there like this??? or any other better ways to reduce tax liablity
CA Galib Mirza
(Expert)
08 February 2014
Dear Naveen
In order to Tax Planning, You client has to make a valid registered gift deed and transfer the floors in the name of sons, in this case as per sec. 56 such transfer is exempt from taxation and not out of perview of capital gains.
If he signs mere mou without any consideration from the the son it will fall under ambit of section 45 and Capital Gain will be attracted, and if AO proves that this is a revocable transfer then he may also provisions of clubbing, due to which income from rent will be added back in the income of your client.
Hope this will serve your purpose.
In order to Tax Planning, You client has to make a valid registered gift deed and transfer the floors in the name of sons, in this case as per sec. 56 such transfer is exempt from taxation and not out of perview of capital gains.
If he signs mere mou without any consideration from the the son it will fall under ambit of section 45 and Capital Gain will be attracted, and if AO proves that this is a revocable transfer then he may also provisions of clubbing, due to which income from rent will be added back in the income of your client.
Hope this will serve your purpose.
Message likes :
1 times
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- GST on reimbursement of expenses
- Visiting card purchase
- Query on effect of registration of property
- Due date for filing return for the partner in partnership subjected to Tax Audit
- Additional trade name
- Whether output tax is taken credit by purchaser
- Equity Share Sale and Purchase
- Number of years as per AS amortisation of Goodwill
- Wrong CMPo8 file
- Goodwill transfer of deceased father’s firm – ICAI applying a 27.04.2026 cut-off to the 3 year limit
- Classification of income of P Ltd company as business or profession
- Opting out" of regime provided under subsection (1A) of Section 115BAC but Form 10IEA is not filed.
- "Please ensure that the Total of the Deductions u/s 54F match the same in Table D in Sch CG"
- Need to correct "Whether it is last installment " response in Form 26 QB
- " Income from House Property " in joint names of co-owners
- REGARDING TDS RETURN OF FORM 27Q
- Notice under e-Verification Scheme
- GST demand notice for ITC reversal against exempted supply.
- RCM ON SECURITY CHARGES FROM INDIVIDUALS
- How to get money back from delisted company
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
