Tax to be paid on sale of property

Hi All,IIt will be great if you can help me with the below question that I have. My grand father had a property on his name which was transferred on my dad's name after my grandfather's death. Recently we sold off the property and the amount was divided among my Father,Uncles and  Aunts equally.

Now the question that I have is that my two uncles further invested this amount which they have in property and they are saying that the tax which has to be paid for sale of property , they would be paying their own share individually though as far as I understand they can not get any rebate on buying a property as the entire thing was on my Dad's name and he is entitled to pay the tax.  

Please let me know  if

1. They get a rebate on buying a property with the amount distributed even if the sale deed was on my dad's name.

2. Can they pay their part of tax  themselves.(Like if my dad has paid them can that amount be deducted from my dad's share for tax purposes)

I would really appreciate if someone can hhelp me on this.

 

Regards,



 

Replies (7)

1. No, because there is no tax laibility on third person, but only over the seller.

2. No. They are not liable to pay any tax, unless you have any 'Family settlement deed' justifying their shares in the sold property.

Thank you so much for your revert Sir. So please correct me if I am wrong as I dont have much idea.Basically.

1. Even though the amount has been distributed  among all brothers and sisters  equally they can not take their Tax amount and pay it seperately.

2. They get no rebate even if they purchase a property because the earlier property was on my father's name.

Please suggest sir. Thanks in advance.

Regards,

Neha

 

Yes, correct........ specifically when your father being only signing authority as 'owner & seller of the property'....

But as I said earlier, the property being ancestral property, and if there existed any family agreement giving power to your father to organize, manage and sell the family property, in that case such arrangements/division is possible. But for that a valid document should exist.

Hi Sir, I apologize for bothering you again . In reference to our last conversation if any such document /agreement if not available previously ,Can it be made now mentioning that it was an ancestral property and the amount has been equally divided among all brothers and sisters and they are liable to take care of their own Tax. Will it be a valid document and will in that case my Uncles and Aunts get an exemption in tax if they further in vest in property.

Thanks for help in advance.

 

The settlement deed should be as on before the property got transferred in your father's name.......

Thank you so much for all your help Sir!!

My Pleasure ....

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