Transfer of Father's Flat in my name
Querist :
Anonymous
(Querist) 21 June 2010
This query is : Resolved
My Father owns a flat in Greater NOIDA. He is a retired senior citizen. He is receiving rental income from that flat which he is showing in his ITR.
My father wants to transfer this flat in my name. I am a tax payer and own a flat in Mohali which I am showing as self occupied in my ITR while claiming interest on loan rebate.
Which is the best way of transfering the flat in my name i.e by way of gift or some other way?
What will be the implications if the flat is transfered in my name with regard to
- Gift Tax
-Income Tax
-Clubbing of income if my father continues to receive the rent from Greater NOIDA flat
-Capital Gain & its exemptions in case I sell any of the two flats at a later date.
Vineet
(Expert) 23 June 2010
Your father can very well gift the flat to you. There will be incidence of stamp duty and registration charges as applicable in state of Uttar Pradesh.
1. No gift tax is applicable in this transaction.
2. You will be liable to pay Income Tax on rental income once the flat is transferred in your name. No capital gains liability in this transaction as gift does not amount to transfer under Income Tax Act provisions.
3. After transfer of flat in your name, it is you who will receive the rental income and pay tax on the same. No clubbing provisions shall be applicable in the hands of your father.
4. Capital Gains shall be chargeable in your hand as and when you sale any of the flat at a later date subject to prevailing law. The entire capital gains provisions are going to be radically changed in new Direct Tax Code likely to be implemented wef 1-4-2011.
