Sale of house property

This query is : Resolved

CA. Rajat Singh (Querist)
Follow

28 March 2016 payment for purchase of house is made by husband but house got registered in name of wife .. now at the time of sales of such house payment was received in bank account of wife and also the transfer deed was made in the name of wife,. my question is this in whose hand the capital gain will be taxable. registered owner or the person who makes the payment.??

CA SUNIL K GARG

CA SUNIL K GARG (Expert)
Follow

28 March 2016 A capital gain is a profit that results from a sale of a capital asset. The person who is the owner liable to pay capital gain in his/her income tax return. So in that case capital gain will be taxable in the hands of wife. This is irrelevant who make the payment for purchase of property.

Amol S Joglekar

Amol S Joglekar (Expert)
Follow

28 March 2016 Income tax act has derecognised BENAMI transactions. The year in which the property was purchased with the funds of H but in the name of W, may be treated as GIFT. This can then avoid the then CLUBBING provisions u/s 64.
And then as rightly suggested by CA Sunil K Garg, the capital gain can be taxed in the hands of W

CA Shyam Agarwal

CA Shyam Agarwal (Expert)
Follow

28 March 2016 Respectable CA Sunil K garg, I need more clarification on this issue. Bcz i facing same issue.
Please tell me that as per Sec 64(1)(iv) why the clubbing will not attraction on this issue.
House property was purchased by husband from own fund but only registry was taken with the name of his wife. it means it is clear that indirectly transfer of assets from husband to wife.

CA Shyam Agarwal

CA Shyam Agarwal (Expert)
Follow

28 March 2016 as per sec 27 if any rental income receive by let-out this property, will be taxable in hand of husband then capital gain also will be taxable in hand of husband.

CA SUNIL K GARG

CA SUNIL K GARG (Expert)
Follow

28 March 2016 As Per section 56(2)(vii), amount paid by the husband to wife considered as Gift and not taxable. As per sec. 27, transferror i.e. husband to be treat as deemed owner and if any rental income receive by let out of property then income will be clubbed in the hands of husband acc. to sec. 64(1)(vii).
But as far as the matter of capital gain, capital gain will be taxable in the hands of wife.

CA. Rajat Singh

CA. Rajat Singh (Querist)
Follow

01 April 2016 respected sir, as far as section 64(1)iv is concerned, income arising from a transferred assets also includes capital gain. although section 56(2)vii is not applicable in this case but 64(1)vi is applicable. besides above section 64(1)vi talks about the clubbing of income from a assets transfered to spouse. this assets word in not defined here. payment made by husband is also a assets which was transferred to spouse. considering above i thought capital gain should be clubbed in hands of husband.

CA SUNIL K GARG

CA SUNIL K GARG (Expert)
Follow

01 April 2016 Sir , section 64 talks about clubbing of income not assets . In this case the husband has transferred cash to wife . This transaction is either loan to wife or gift to wife . But in bith the cases the owner is wife , than capital gain is wife income . But if the husband had treated that house as investment in the name of wife , than it is assets owned byhusband and taxable inhis hand . Hebce in boththe cases rent is taxable in thr hands of hudband but capital gain will depend on treatment , how the husband has shiwn that investment in his ITR

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now