08 June 2012
Thanks a lot for your replies. My exact issue is; In my young age - father supported me to buy me 2 flats in Pune. After retirement, he sold his Mumbai flats can came to stay with us in Pune - in one of my flats.
Now he is worried that in worse case scenario - if something happens to me - then my parents don't have a house to stay of their own.
Hence I have 2 options, 1) Transfer my one flat in the name of my mother. 2) Write a will - where I clearly indicate that after me - my parents can reside in my house - until they live. Later the flat is transfered to my son.
What is the best advice for me - without unnecessary tax liability and also legally safe for my parents.
08 June 2012
Under both the options there is NO tax implication either in your hands or in the hands of your parents.
However, under the first option you will have to incur stamp duty to register the flat in the name of your mother.
Under the second option, you will have to incur probate fees and legal fees for drafting a will.
A will can result in dispute among your legal heirs and your parents.
Since you have 2 flats, It is better to gift one to your parents. The other can continue in your name and will pass on to your wife/son in case of your death.
This way, you can take care of both your parents and your wife/son.
CAclubindia
