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Shriya

Category : Exempt I..,

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December 18, 2018 12:18 pm

Sir, Can you please clarify if these both can be considered 'relatives' as per income tax act and does the property transfer between them qualify as 'non taxable'.

Ajay and Ajith are blood brothers. Ajith's wife is Anjali. Ajith passed away 5 years back.

Now if there is a transfer of property between ...

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Amlan Dutta

Though sister in law falls under acceptable relative definition here the case is different . If Ajith were alive , then this gift ( under eligible criteria - no compensation , registration done at sub registrar office , stamp duty paid etc etc ) would qualify under relative purview and not attrac...

December 18, 2018

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Shriya

Thanks Sir, I am just trying to learn now. Not an expert, just simulating scenarios in mind and searching for answers.
I will post any update if i get a concrete answer on this. Thanks!

December 19, 2018

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Amlan Dutta

December 18, 2018

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Shriya

Category : Exempt g..,

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December 18, 2018 12:53 am

Hello Sir,

What will be the treatment of tax if there is exchange of property/money within the relatives specified?

Suppose A gifts a land to B (A & B are Brother & Sister) and B gifts back a certain amount of money to A. This seems like a transaction however because they are 'relatives' specified und...

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Amlan Dutta

Understand that merely because someone is brother and sister ( falls under relative purview) , the transfer of any asset ( cash or immovable ) cannot be automatically treated as gift ....a proper gift deed has to be executed and registered ( only when gift deed is registered does it become legally ...

December 18, 2018

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Shriya

Thanks a lot sir, your quick and detailed explanation is immensely helpful

December 18, 2018

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Amlan Dutta

One point bought by ayush and which marks bearing on this answer is when is a gift qualifies to be one ...a gift without consideration alone can be considered as gift ....Note that , If the gift is made to specified relatives, including spouse, parents and siblings, it is not taxed under the Income Tax Act( however without consideration) A gift is considered valid if it is made voluntarily and without consideration. It is also essential for it to be accepted by the donee.

The consideration portion is tricky here , what must be done is that the consideration should not exist ...the donee can gift a sum of money independently later on
Also, please note that a gift of immovable property amounts to its transfer under the "Transfer of Property Act" Hence, the gift deed needs to be compulsorily registered with the sub-registrar in the area where the property is situated.

A copy of the gift deed, title deeds of the property, encumbrance certificate, statement of particulars of the property, its market value and the extract of assessment register of the property must be submitted at the time of registration The stamp duty is calculated as a percentage of the market value of the gifted property and differs from state to state. Such a gift to relatives attracts stamp duty at a lower rate and is sometimes exempt in some states ...if consideration has already not been taken , get it delayed else department may not accept it to be a gift ...(note had it been a property transfer to a third party( not relative ), then the rules of the game change completely........

Take a detailed opinion of a practising chartered accountant for this case.

(The gift must be made and accepted in the lifetime of both the donor and donee. The acceptance is shown through a gift deed, which is an agreement spelling out that the donor wants to gift the property listed in the deed to the donee, and that the donee accepts it. The signatures of both the parties are affixed in the presence of at least two witnesses)

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December 18, 2018

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AYUSH

But sir remember these transactions are Been classified as cross relative transactions if the transaction are been done to avoid tax like as you say first property transfer between a to b and a certain sum was also transferred from b to a in consideration will lead to tax implications.

December 18, 2018

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Amlan Dutta

You are right , the gift by definition itself shall fail if there is a consideration aspect to it ...but if the consideration can be marked as separate activity and much later as a independent event not related to the property , there should be no problem

December 18, 2018

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Amlan Dutta

December 18, 2018

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Shriya

Thanks a lot sir, your quick and detailed explanation is immensely helpful

December 18, 2018

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Amlan Dutta

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December 18, 2018

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Amlan Dutta

December 18, 2018

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AYUSH

December 18, 2018

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Shriya

Category : Capital ..,

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December 17, 2018 3:05 pm

Dear Amlan,

My family facing a tricky scenario, request your help in understanding the tax implications of the situation.

We had bought a house in Bangalore in 2013, at that time we did not have funds and we had taken a loan to buy the property. The property is in the name of my dad and my 2 elder br...

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Note, for seeking capital gain exemption under section 54 , the seller should purchase a residential house either 1 year before the date of sale/transfer or 2 years after the date of sale/transfer. In case the seller is constructing a house, the seller has an extended time, i.e. the seller will have to construct the residential house within 3 years from the date of sale/transfer...Here the property is bought in 2013 and you are planning to sell and realise gains from the sale of the ancestral property only in December 2018 or maybe later so clearly section 54 cannot be used ( and neither any other capital gain exemption sections ) ...so, clearly for the Bangalore property purchased in 2013 , the gains arising from the sale of the ancestral property cannot be used ......

This part is irrelevant but just for your knowledge ... If the property EMI is being paid by the brothers , then it is co owned by them to the extent of their investments in the property and not your dad even if it is in all of their name ....Now, say the ancestral property is sold in December 2018 and there are indexed capital gains (say Rs 20 lakh ) ...first figure out the portion attributable to your dad...say the whole is i.e Rs 20 lakhs Rs.. Your question is whether the 20 lakh rs can be used by your father to preclose a portion of the existing loan for the property of Bangalore in 2013 . Answer is no ...he can save taxes to the extent of the Capital gains by investing in a property himself ( not of his son's) and in prescribed time period as outlined in section 54 of the act.

(I also recollect you having asked something about NPS earlier . you may like to change recent changes made in the NPS investments ..Tier II investments now shall enjoy decuction benefit under section 80 C)

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December 17, 2018

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AYUSH

Amlan sir in the above case assessse can also invest the receipt recieved from selling by available exemption 54h exemption by deposit the sum to NHAI or Govt specified bond within 6 months of selling of property

December 18, 2018

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AYUSH

Thanks amlan sir

December 18, 2018

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avinash chander

Category : Rectific..,

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December 17, 2018 12:22 pm

ITR 1 A Y 2018-19 -return processed.did not get refund due to wrong mentioning of TAN in TDS schedule, -->submitted rectification request sent under transaction id: 6474845897 but not -->submitted refund reissue on the same day. but now refund reissue can not submitted due to this remark "" No refun...

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Amlan Dutta

Submit rectification request for Tax credit mismatch and meet the assessing officer.

December 17, 2018

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