my mother aged 75 received every month 30000 frm bank under re verse mortage can u explain what is means by reverse morge and that income i.e 30000 pm is it charged to tax
Reverse Mortgage is as its name suggest the Reverse of General Mortgage and its whole idea is entirely opposite to the regular mortgage process where a person pays EMI to the bank for a mortgage property.
In it the person (Senior Citizen) mortgage the Property to the bank and S/he receives Lumpsum amount against PLUS Per month payment.
The senior citizen borrow its not required to service the loan during his lifetime and therefore does not make monthly payment of principal and interest to the bank. On the borrower's death OR on the living house property permanently the loan is prepaid along with accumulated interest through sale of house property.
Now coming to the taxation part:
1. Lump sum amount received by Borrower is exempt u/s 10(43).
2. Per month amount received from bank is also Tax free u/s 10(43).
3. Further the Transaction of Reverse mortgage does not regarded as Transfer u/s 47 therefore No question of Capital Gain as well.
So, in your case Per month amount received by your mother is exempt u/s 10(43).
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