Parent buying property for major child

No issue as such.  

A genuine loan from the parent to the adult child is generally distinguishable from a gift, but the direct payment to the builder needs careful documentation. If the child is the sole registered owner and the parent’s payment was intended as a loan, record the amount as a recoverable debt and document the terms and repayment obligation; otherwise, the payment may be viewed as a gift or as evidence that the parent funded property held for their benefit. Keep the sale deed, bank trail, loan confirmation and source-of-funds records, and have the child report rental income and claim only eligible deductions as owner.

• For money transferred to the child for registration and interiors, use a written loan record and retain invoices and bank evidence. Cash repayments or cash receipts can create separate tax-compliance issues.
• A bona fide loan is not ordinarily income merely because it is received, but the label “family loan” alone does not establish that it is repayable. Interest, if charged, has tax consequences for both parties.
• A mismatch between the deed, payment trail and loan records may invite questions about beneficial ownership, the source of funds or the genuineness of the loan. The exact treatment depends on the deed, contemporaneous records and actual repayment conduct.

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Parent paying for a property in an adult child's name:

• The funds are a gift from the parent (exempt for the child, a relative). The child is the owner; future rent and capital gains are the child's (no clubbing for adult children).

• TDS under 194-IA (if price is Rs 50 lakh or more) is deducted by the buyer (the child), even though the parent funds it. Keep a gift letter.