Celebrate CA Day with CAclubindia PRO. Use Code: CADAY10 Subscribe Now!

Property sold by mother can we buy jointly now

abhishek (Staff) (91 Points)

02 June 2025

Hi, My mother has sold a propert which was in her name and now she wants we buy jointly as she is aging.

Now please confirm:

1. As we plan to buy in joint ownership but since all payment will be done from her account will this be ok for my tax record.

2. Also as value will be avove 50L we will deduct TDS and that too from her PAN as buyer.

As we plan to do above to save on LTCG, is all above fine.

Also is ownership under joint tenancy allowed for us. Or can she do gift deed in my name for her share after 6 months of new propert registration.

Reply
Follow
Share

4 Replies

Rama chary Rachakonda (Master in Accounts & high court Advocate) (8423 Points)
Replied 02 June 2025

Joint Property Purchase and Tax Implications -

*Joint Ownership*: Buying a property in joint ownership with your mother is possible, and payments can be made from her account. -

*Tax Record*: Since the payment will be made from your mother's account, it's essential to maintain proper documentation to avoid any tax implications for you.

TDS Deduction - *TDS on Property Purchase*: If the property value exceeds ₹50 lakhs, you are required to deduct TDS (Tax Deducted at Source) under Section 194IA of the Income Tax Act.

- *TDS Deduction from Seller's PAN*: In this case, since your mother is the seller, TDS should be deducted from the consideration payable to her, and it should be deposited using her PAN. Ownership Structure -

*Joint Tenancy*: Joint tenancy is allowed, but it's crucial to specify the ownership structure (joint tenancy or tenancy-in-common) in the sale deed. -

*Gift Deed*: Your mother can consider gifting her share in the new property to you after 6 months of registration, but this would have tax implications, and it's essential to consult a tax professional. Recommendations -

*Consult a Tax Professional*: To ensure compliance with tax laws and regulations, consult a tax professional or a chartered accountant. -

*Proper Documentation*: Maintain proper documentation of payments, TDS deductions, and property registration to avoid any future disputes or tax implications.

By taking these steps, you can ensure a smooth property purchase and minimize potential tax implications.

abhishek (Staff) (91 Points)
Replied 03 June 2025

Thanks a lot sir for your detailed reply.

TDS: When paying TDS can I pay TDS whole from my mother's PAN only though technically there are 2 buyers.

Regarding Joint tenancy as I checked with Documentation person he is totally unaware and said this does not work in India and suggested to do a will instead.
Do you have any suggestion what wording should I get added in sale deed.

Gift deed: And in case the Joint tenancy option does not work since this is to save LTCG after what time frame should my mother do gift deed to avoid tax issues. And by tax implication as I understand it might be for her tax as we need to keep new property atleast 3 yrs to claim LTCG. Or is there some tax implication for me too ?

Ranjan (Mr) (358 Points)
Replied 06 June 2025

Hi Abhishek

Mr Rama Chary has already explained a lot.

Following are my few bits:-

A property can be purchased under the joint names of your mother and your name with percentage share in proportion to the amounts paid by each joint holder. So the tax benefit would be proportionate to the amount paid by each joint holder.

To keep it crystal clear for future with tax authorities, you (Abhishek) can put in 1% or even less ( but not Zero) of the purchase price and rest of the amount by your mother. LTCG tax for your mother would be calculated accordingly (99% property purchase price), and you will need to explain ( if required) balance 1% paid by you to the tax people.

During filing of ITR, both would need to show in individual ITRs the property purchase along with TDS deduction from the seller ( as per percentage of the property share) and the share of the property in percentage. Tax would get calculated accordingly.

Finally, when one of the joint holders is no more in this world, the whole property would be vested automatically to the remaining joint holder. So no need for any gift deed etc, which would lead to re-registration with good amount of registration fee.

Regarding, changing of registration documents in such a case( the method explained by me), different states have different bye laws, some states allow registration change with just a tiny amount of a few thousand rupees. Other states may ask for a percentage of the market rate of the property at that time, which could be even 1%.

Hope I have been able to provide some useful info.