My well off older brother wants to give me refundable loan of 5L annually so long as I do not persist on intestate partition of freehold residential property in Delhi as long as our mother (of age 84) is alive as he feels she will be distressed. Other than home expenses, I need the money for my child's college education. This would be via bank-to-bank transfer and cash deposit into my savings account only. I would need to provide him with an annual receipt of total refundable loan received in that particular financial year. The said freehold residential property belonged to my father who died intestate in the year 2000. I have no other assets/ business to refund the loan other than my share in the above residential property as and when it is partitioned and sold by me.
1. Would I need to show the loan in my income tax return on annual basis? If yes then I would need to show it under which head of income?
2. Should the loan be in writing?
3. Would the income tax authorities deduce from above such agreement between blood brothers that I have given a verbal release of my share/ part of my share in the above residential property and, thereby, apply long-term capital gains tax on the whole of my share?
Here I am particularly concerned with what constitutes Transfer under the income tax act:
viii. Disposing of or parting with an asset or any interest therein or creating any interest in any asset in any manner whatsoever.