Hi,
Dear Friends, I would appreciate if any of you could advise on below (relating to Income Tax : House property & Cap Gain ):
my brother bought a land and constructed house on it some time back. As he is not employed and not elilgible for loan, I had to borrow in my name and pass on the benefit to him.
“The land was acquired in my name in May 2007 and construction of the house completed on Oct 2009”.
EMI is being recovered from my salary account (which is reimbursed to me by my brother on a monthly basis, on mutual agreement and nothing is official)
I have been claiming IT exemption per house property provision on the EMIs paid for the last 2 years. I have advised my brother to save as much money as possible to close the loan before end of 2012. I think he will do it by 2012 or max by 2013.
After repaying the total loan to bank, I have to transfer the title of the property to my brother as the loan is being repaid by him.
The issues now are :
1) will there be any capital gain if I transfer the asset before expiry of 3 yrs from the completion of construction ?
2) Will there be withdrawal of the tax exemption which I have/(am) availed(/enjoying) until repayment of total loan to bank ?
3) I know there is no gift tax from 1998, however, would this transaction by any chance attract any other tax other than double registration charges (as the transfer is going to take place by way of gift just to reduce taxes)
Thank you
Dj
CAclubindia
