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Query of hp

Shah Yash (surat) (80 Points)

12 August 2014

My father has 2 house property from last 20 years and 3 shops from last 10 years which all are received in herritance from my grand father who expired in A.Y. 2011-12 of which none of the property were in books Now my father has purchased new house by selling 2 shop and 1 house received in herritance Now i am seeking your advise that how will i saw it in my books As my father was having 2 hp from which one should be complsrily deemed let out but as we have not put it into books we have not paid tax Now how can we give treatment of it please guide me

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10 Replies

Chintak Shah (student) (117 Points)
Replied 12 August 2014

when were the mentioned capital assets sold..wrt in which assessment year?

And year of inheritance is ?

Period of holding of above assets from date of inheritance?

Anubhav (Chartered Accountant) (429 Points)
Replied 12 August 2014

Hi,

This case is quite complicated. Since none of the property were in books, any addition during current year may arouse the senses of income tax department.

Systematic planning need to be done, so that all the assets can be incorported into your balance sheet.This process might take time.

For further details PM or mail me, we will definitely try to support your case.

AJH & CO.

anubhavjain @ ajhco.in

Tribhuvan Aditya Singh (Student as well as Self-employed) (3710 Points)
Replied 12 August 2014

to answer your query, date of inheritence is of very much importance, without this it is a bit difficult to answer.... however assuming that property was legally trfd on your father's name after death of your grandpa and shops are rented to others. then your father is liable for any tax liab. after that period only, i.e. AY 11-12... now if you claim exemption of sec 54 for new property purchased against sale of shops, the i.t.dept. may raise query on ownership and any income derived from such property. for this, there is a solution that you will have to prove that income from all shops and one house was below taxable limit after providing standard deduction of sec. 24b... if this is possible, then you dont need to worry about anything and claim exemption of sec 54.

Shah Yash (surat) (80 Points)
Replied 12 August 2014

First of all date of herritance was 12th may 2010 And though rental income was below excemption limit but total taxable income of my father as well as my grand father was taxable Now what should i do

Shah Yash (surat) (80 Points)
Replied 12 August 2014

And we have purchsed new house in A.Y. 2013-14 and sold two shops at the same year But registration is neither made of house nor of shops for other parties as there was contract that once we register our property than only we will give them our dastavej ( document of shops)

Mihir (Wealth Manager) (5293 Points)
Replied 12 August 2014

There is no tax on transfer of property through inheritance. But when your father sold the shops, capital gain will arise and will have to be shown in the ITR. If property is purchased against that then that too will have to be shown in the ITR. Since you are based in surat, large portion of the deal will be in cash, and therefore, the tax liability shall not be so large. You may consult a CA, compute the long term capital gains on sale of shops, and claim exemption on the same. If registration is pending, then you may register it by paying 1% registration charges on the sale deed.

Tribhuvan Aditya Singh (Student as well as Self-employed) (3710 Points)
Replied 12 August 2014

although the properties are not registered, an agreement to sell would have been signed in both cases. that date of agreement shall be considered as date of transfer.... .... you will have to show these sale and purchase of properties in your itr as the info will be supplied by registration dept to revenue authorities at a later point of time.... .... as mr. mihir said ltcg tax may be less in your case and also you can claim exemption, you dont need to worry on this part... the only prb is non declaration of income from properties for previous years, for this you could only wait for i.t.dept to issue notice and then you can truly declare your income and pay taxes.

Shah Yash (surat) (80 Points)
Replied 15 August 2014

Okk sir thank you And kindly can you make that around what figure tax should arise House are of 10 00 000 and two shops are of 5 00 000 and all are in villege

Tribhuvan Aditya Singh (Student as well as Self-employed) (3710 Points)
Replied 15 August 2014

@ shah yash.... for tax calculations we would require various details such as date of purchase of land, cost of construction, any capital repairs, sales consideration (already given by you) and date of sale.... and then it will be calculated.. you should visit any tax consultant nearby to help you with this...

Shah Yash (surat) (80 Points)
Replied 15 August 2014

Dear sir first of all i an very thankfull to you for giving me such informatiom But my only Question is that can any one raise Question that you have not shown houses and two shops in books than how can you declate that you have purchased house by sellling it And if any one cam raise what are remedies available to me that what can i do to make my position strong