Validity of such transaction - legally & tax point of view
surajp21
(Querist) 04 September 2013
This query is : Resolved
Dear sir/madam
I wish to know validity of this transaction from legal as well as income tax point of view.
Mr. A wants to buy a flat in Pune by selling his non-agricultural (N.A.) plots located at native. The plots are located 11 kms from municipal limits and population of his native is less than 10,000. However Mr. A is physically challenged having paralysis attack, he can not travel. So he decided to give all money to his son who is in Pune to buy a flat for him (i.e. Mr. A). The flat will be purchased in the name of Son. All registration formalities will be done by his son. So he wants to make an affidavit stating he will sell his N.A. plots and give money to Son who, in turn, will buy a flat.
What is validity of such affidavit from Mr. A’ point of view? Whether will he liable to capital gain tax, from Mr. A and Son’s point of view? Reference to sections are welcomed.
Thanking You
Regards
Suraj
Rajendra K Goyal
(Expert) 01 November 2013
A is liable to pay capital gain tax applicable if any.
The money is given to son as gift or loan, if as loan, interest is taxable. The gift is to near relative hence no gift tax payable.
