Gift income tax

X an individual wants to purchase a house property. Lets assume the purchase consideration is Rs.20 lakhs. The property has to be registered in X's name. X' father, from his bank account paid Rs.5 lakh directly to the seller. The remaining Rs.15 Lakh was settled by X from his bank account. Can X's father pay directly to the seller In order to fit this transaction as a cash gift ? Will it have any tax consequences?

Replies (5)
Quick Summary
This discussion explores the tax implications when a father pays a portion of his son's property purchase directly to the seller. It clarifies that a direct payment from father to seller might not qualify as a gift for tax purposes. The recommended approach is to document the amount as an interest-free loan from father to son, with the son then making the payment to the seller.

He should pay to his so as gift and son should pay to builder. If he takes this amount as loan from father with interest or interest free then father can pay directly to builder

Sir,

 

Thanks for your reply.

if my understanding is correct, if father pays directly to the builder then it cannot be called as gift?

So in the above case how to deal with the amount of Rs.5 lakh paid by X's father directly ? 

Take it as a interest free loan from father to son with proper documentation . Whenever feasible son can keep returning loan with digital payment. 

Respected sir,

Thanks a lot 

Its on you , how to show in the books of X......... ..

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