I am a senior citizen and have been an income tax payer for the last 36 years.
My wife purchased a plot in 1999. In 2006, we entered into an unregistered 50:50 development agreement with a builder. The builder constructed six flats. In 2023, three flats (the builder’s share) were registered in his wife’s name through sale deeds executed by my wife and the builder.
To transfer those three flats to my name, we could not execute a gift deed because the builder was also a party to the title. Since my wife did not have exclusive ownership of those flats, the only practical option was a sale deed executed by my wife and the builder in my favour. I paid ₹16,32,000 towards stamp duty and registration charges. No money was exchanged between my wife and me.
The transaction now appears in my AIS as Sale of Immovable Property, and it seems to result in a capital gains tax liability of around ₹20 lakh.
I find it difficult to understand why such a large tax should arise when the property has effectively moved within the family and there was no actual consideration paid.
Can anyone advise:
- Is there any way to legally avoid or reduce this capital gains liability?
- What would happen if I simply ignore the AIS entry for the sale of immovable property while filing my return?
Any guidance would be greatly appreciated.
CAclubindia
