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Real Estate Transaction Structuring with Power of attorney & Beneficial Ownership

This query is : Resolved 
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(Querist)
09 April 2025 URGENT!!!!
I have 4 clients who together have invested in a Real estate colony (Converted a large agricultural land to residential plots) , but the title deeds are in the names of 4 third parties. My clients want to control the sale process and receive payments directly.

Plan: Create a partnership firm (owned by clients) and take registered Power of attorneys from the land owners. The firm will act as an agent, sell the land, collect proceeds in its own bank account, deduct its commission, and remit the balance to the third parties at year-end.
Capital gains tax will be deposited in the names of the third-party title holders only.

Example: If a plot is sold for ₹100, the firm collects the full ₹100, deducts ₹10 as commission, and remits ₹90 to the land owner. This is repeated for all plots, and settlements are done annually i.e Rs 90 will be remitted back in third party's bank account.
The goal here is not tax evasion but just to take the token amounts and sale proceeds in client's account so that they are not dependent on third parties to collect the money.

Is this structure valid from Income Tax and compliance perspective? Any risk of the firm being taxed on the gross receipts?
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Dhirajlal Rambhia

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Dhirajlal Rambhia (Expert)
10 April 2025 Yes, valid.
Depends upon the way, power of attorney constituted...
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Chartered Accountant

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Chartered Accountant (Querist)
11 April 2025 Thank you for your reply sir, So should I constitute a general power of attorney and specify the structure while drafting it?
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Dhirajlal Rambhia

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Dhirajlal Rambhia (Expert)
11 April 2025 Yes, after constitution of the partnership firm....
Get the selling rights with financial management powers ......
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Chartered Accountant

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Chartered Accountant (Querist)
11 April 2025 Is there any risk of the firm being taxed on the gross receipts if the case comes under scrutiny?
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Dhirajlal Rambhia

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Dhirajlal Rambhia (Expert)
11 April 2025 No, if the firm has accepted the job on sole selling agency/brokerage terms... Sign such contract with the land owners.
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Chartered Accountant

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Chartered Accountant (Querist)
11 April 2025 Okay sir I really appreciate your support, Thank you.
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Dhirajlal Rambhia

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Dhirajlal Rambhia (Expert)
11 April 2025 Good luck.
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