ajit rai ( ) 24 July 2016

Purchase of property in married daughters name

i am 70 years retired ex-serviceman. I have two daughters and two sons. Both the daughters are married and staying with me and looking after me. My wife had died a long time back. One of my son is outstation and is not bothered . My eldest son is after my property and had filed a case against me stating joint owneship in my property which is a false claim. I have somehow managed to sell my property at very cheap rates and have decided to give adequate amount to him to settle the case.

I want to know that I will be receiving aound Rs 66 lakhs from my property. 15 lakhs i will give to my son. Now i want to take the property in the name of my married daughters to avoid any problem. Please suggest me the ways and the tax implications keeping in view the law of benami transaction. I will be very grateful to you all.

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4 Replies

Dr J C Vashista (Advocate) 24 July 2016

@ Ajit Rai,

How did you get ownership of the property i.e., whether you have purchased the property i.e., self acquired or by inheritance?

If it is self acquired, you can dispose it of as you wish;

However, you can dispose of your share in the property inherieted by you.

Consult a local lawyer for proper appreciation of facts of the case.

P. Venu (Advocate) 24 July 2016

It appears that you have acted in haste; unless the property was ancestral, your son or any of the children had no vested right during your lifetime. If the property was ancestral, the legality of the sale itself could be put to question.

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 ) 24 July 2016

The Hindu Succession Act made a revolutionary change in the law for female Hindus. For the first time, a Hindu female could become an absolute owner of property. She could inherit equally with a male counterpart and a widow was also given importance regarding the succession of her husband's property as also to her father's property. The Act was amended in 2005 to provide that the daughter of a co-parcener in a joint Hindu family governed by the Mitakshara Law shall, by birth, become a co-parcener in her own right in the same manner as the son, having the same rights and liabilities in respect of the said property as that of a son.

GANDHI MOHAN BHARATI (Pensioner) 24 July 2016

Tax Implication will be that the sale will attract Capital Gains Tax under the Income Tax Act. The Department publishes an indexation list. The Capital Gains is simply "the actual cost of sale" minus"the actual costof puchase divided by the index of th year of purcase multiplied by the index of the year of sale". You may have to pay 20% as Capital Gains Tax. Howevever, if you invest the Gain Amount in certain Bonds such as NHAI or REC (they give 6% annual interest - lock in period 3 years) withib 6 months of the sale (maximum limit 50 lakhs), you may escape the Tax. As a Income Tax Return will have to be filed, you better consult a Tax Filing Auditor. You, may not be able to do all that is needed yourself. As the value is above 50 lakhs, the buyer will be required to deduct Tax at Source, 1%, remit it to IT Department and will be required to give you a TDS certificate. Tax implication arises irrespective of the fact of ownership as ancestral (HUF) or Individual. If you go not have PAN for HUF you will require that and also a Bank account for HUF. Otherwise you may proceed as an Individual.

Kindly take advice of an AUDITOR.