Transferring under construction house from mother to son
Usha Y Nayak
(Querist) 23 March 2013
This query is : Resolved
Dear Sir/Madam,
Suppose mother (69 years old) invested capital gain money (obtained by selling land) on building new residential house to exempt from tax (CGT), house is under construction and the money is not sufficient to complete the house.
For the remaining money to complete the house,younger son(3 sons + one daughter)wants to take housing loan on his name for which he can get tax exemption for his annual income.
1) Whether it is possible to transfer the under construction house along with located land to younger son.
2) Is there any specified law for not transferring/gifting to son as house built is to exempt from CGT
3) Is there any other option so that there is no issue of CGT and son can take housing loan for the same house.
Please give your suggestions,
Thank you.
H.M.Patnaik
(Expert) 24 March 2013
1)If the building under construction is being built on self acquired landed property, then mother can gift the said property to younger son without any hassle.
2) The moment mother transfers the title to some other person , there may arise short term or Long term capital gain considering the period of holding .
3) In my opinion , there can be a Co-ownership agreement between the mother and younger son and housing loan can be availed on that basis to suit your requirement.
Raj Kumar Makkad
(Expert) 24 March 2013
The procedure told to you by Patnaik is accurate to which I also endorse.
Usha Y Nayak
(Querist) 25 March 2013
Dear Sir,
Thank you, but the land is paternal inherited ,declaration land. Agricultural converted land in Muncipalty area (Udupi, Karnataka). Part of it was sold by mother (as father expired 10 years back)and same money was capital gain and invested for the house.
Now younger son can be co-owner of the land and co-borrower for the housing loan?
All other sons and daughter are do no have any conflict regarding this.
