Sale of joint propert where nri has contributed 100%

Dinesh Bhargava (Querist) 19 August 2021 This query is : Resolved
In joint property, my NRI daughter has paid full consideration of 100% contribution (definite and ascertainable from bank statements) and I, a resident, have paid nothing. Under IT Act, only she is considerd as actual owner, and being an NRI, her sale proceeds must compulsorily go to her NRO a/c.

1. Problem: I hope the buyer pays her the full amount; I can give a NOC or Indemnification to the Buyer/his loan-giving Banker for payment of full amount to her.
I can even add a suitable separate clause in Agreement to Sell and later Sale Deed, mentioning her 100 % payment and asking for 100% payment to her.
2. Problem: If Buyer were to pay her only 50%, would not the ITO issue notice to her for not depositing 100% in her NRO a/c. (And perhaps Notice to others also)
3. Any other way to ensure she receives full payment in her NRO a/c?
Thanks
DC Bhargava
dcbhargava41@yahoo.com

Follow Query

Report Abuse

Quick Summary

This discussion addresses the sale of a joint property where an NRI daughter contributed 100% of the funds, while her resident parent contributed nothing. The core issue is ensuring the buyer pays the entire sale proceeds directly to the daughter's Non-Resident Ordinary (NRO) account, as required by Indian Income Tax law for NRIs. The parent, as a co-owner on paper, is exploring ways, such as a No Objection Certificate (NOC) or indemnification, to facilitate this direct payment and avoid potential tax complications arising from splitting the payment.

kavksatyanarayana (Expert) 19 August 2021
The facts stated by you are confusing.

Dinesh Bhargava (Querist) 20 August 2021
In joint property, my NRI daughter has paid full consideration of 100% contribution and my payment is zero %. Under IT Act, only she is considered as actual owner, and being an NRI, her sale proceeds must compulsorily go to her NRO a/c.

How to ensure that the buyer/his Banker pays her the full consideration amount, and not 50 % to her and 50% to me under General law.

I, the non-contributor, can give a NOC or Indemnification to the Buyer/his Banker for them to make 100% payment to her only, to her NRO a/c. I can also incorporate a suitable clause in the Agreement to Sell and Sale Deed to this effect.

Thanks
D C Bhargava
dcbhargava41@yahoo.com

Pradipta Nath (Expert) 20 August 2021
Get a negotiation deal acknowledged with your wants from the buyer by you and your daughter both!

SHIRISH PAWAR, 7738990900 (Expert) 20 August 2021
Hello,

Yes, find a buyer who is ready to pay as per your desire.

P. Venu (Expert) 20 August 2021
Why the buyer the need be involved? Is it not the usage that the buyer pays the consideration to the sellers i.e. the joint holders leaving it to the latter to apportion the consideration at their discretion?

Dr J C Vashista (Expert) 21 August 2021
You have confused the facts vis-a-vis query regarding payment of purchase amount and realisation from sale proceeds, which are on opposite sides of the transaction. Besides this, provisions of Income Tax Act, 1961 are to levy tax on income of individual/ assessee.

Both of you are the titleholder of the property purchased and being sold, isn't it ? In such an eventuality both of you will receive sale proceeds and execute sale deed in favour of vendee (purchaser).

Dinesh Bhargava (Querist) 21 August 2021
My simple question in simple language was - can my NRI daughter receive 100% of the sale proceeds from the buyer as she has made 100% contribution, and not 50% to her and 50% to me. I, the non-contributor, can give to the buyer my NOC or Indemnification so that the buyer can pay her 100%.
Thanks in anticipation of clear reply.

K Rajasekharan (Expert) 21 August 2021
The query is not clear still but let me answer it as I understood.

If both you and your daughter jointly sell a property, both of you can suggest the buyer or bank to pay the amount in what manner, either as one consolidated cheque or transfer, or as separate payments. There is no stipulation that the money should be divided into two. But you have also to sign the sale deed along with her.

But if your daughter is getting the whole amount in her account for the purpose of evading income tax, the income tax department well can ask you to pay the tax for the half amount, when the total amount was diverted to a NRO account for evading tax.

kavksatyanarayana (Expert) 21 August 2021
Your NOC or indemnity is not necessary.

Dinesh Bhargava (Querist) 21 August 2021
Thank you all. There is no question of evasion of tax. Her 100% proportion of contribution merits 100% payment to her. Since she is an NRI, under IT law, the payment has to go her NRO a/c. If 50% payment is made to me, the ITO can question her and also me who paid nothing, why it was split and paid into a resident a/c? .

Previous

Next

You need to be the querist or approved LAWyersclub expert to take part in this query .

Click here to login now

Similar Resolved Queries :

Ask Query
Unanswered Queries