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House property

vikas (Practice) (31 Points)

27 June 2012

Hello friends,

Pls advice me that, if my father sale his property and purchase new property in my name, and I have already one self occupied house than what are the tax implication in this case..if i Buy another house in my name.

Regards

Vikas Jain

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16 Replies

Manjunatha M K (Manager - Accounts) (318 Points)
Replied 27 June 2012

Your Father Should Pay Capital Gain Tax.

For you, House Properties except One House Property will be Deemed to be Letout and will be taxed accordingly.

KRISHNAPRASAD IYER (B.Com , CA Final) (657 Points)
Replied 27 June 2012

Agreed with Manjunath

Manjunatha M K (Manager - Accounts) (318 Points)
Replied 27 June 2012

Instead you can do Following Transactions (If Old Property is Residential House)

1. Take Old House Property as Gift from Your Father.

2. You Sell the Property

3. Buy Residential Property in your name within the time limit u/s 54

4. Avail Tax benefit u/s 54.

(For details refer Sec 54 of IT Act)

You are saving Capital Gain Tax. But Deemed to be Let out Provisions will apply according to Previous Thread.

Deepak Parsai (Future CA) (623 Points)
Replied 27 June 2012

Your father can avail benefit of section 54 as there is no condition to buy new house on his own name. Here there is no problem if you have already a house on your name. But if you buy another house on your name or your father's name then your father can't get its benefit(assuming you are buying through ur income).

vikas (Practice) (31 Points)
Replied 27 June 2012

Can my father take benefit of Section 54 if my father sale his self occupied property and buy new house in my name ? and I have already a one house peoperty in my name.

vikas (Practice) (31 Points)
Replied 27 June 2012

Can my father take benefit of Section 54 if my father sale his self occupied property and buy new house in my name ? and I have already a one house peoperty in my name.

Deepak Parsai (Future CA) (623 Points)
Replied 27 June 2012

I have given your answer already.

CA Karan Lodhi (CA and B.com(hons.)) (879 Points)
Replied 27 June 2012

Agreed with Deepak.But 1 more thing is that if u fail to buy the residential house within the time as specified under section 54 then u can deposit the amount in capital gain A/c with any scheduled bank to avoid tax arising from capital gain income.This will give u extra time to purchase residential house.

Manjunatha M K (Manager - Accounts) (318 Points)
Replied 27 June 2012

Dear Deepak & Karan,

If the property is bought in the name of the Son, how to Substantiate the investment of Capital Gain of Father ?

Father's name will not appear in Sale deed. Right ?

CA Raman Kumar (job) (132 Points)
Replied 27 June 2012

Dear,

Benefit of exemption is availed by only assessee it means here your father is assessee not u.

Neha sharma (-) (1257 Points)
Replied 28 June 2012

to be eligible for claiming exemption, the new property purchased should be in the name of the same person in whose name the property was sold..

AJAY BHAGAT (ACCOUNT MANAGER) (22 Points)
Replied 28 June 2012

Mr. bikas as per your question you have get partial knowledge about your quetion becouse U/s 54 will be availabe only in two cases 1) if you have purchased a new house 1 year before or willing to purchase or cunstruction within 3 years from the sale of the house. 2) deposit in capital account ( i.e open anew account in any nationalised bank for this purpose) on or before 6 months of due date of filling or return of filing, wichever is earlier.

CA.Varalakshmi.M (Manager-Finance) (482 Points)
Replied 28 June 2012

@ vikas

There is no restriction regarding on whom name ,the purchase should be.

The Delhi ITAT recently decided in a case that if the payment for purchase of new house is made by the assessee,the eligibility for availing the deduction is satisfied,merely because the title deed contain the name of another person,it cannot be denied.

So ur father can purchase property in ur name