01 December 2009
MY CLIENT HAS GIVEN ADVANCE OF RS 40LACS TO PURCHASE A FLAT.RS 12 LACS PAID IN 06-07,RS. 20LAC IN 07-08 AND RS.8LAC IN08-09. FLAT IS UNDER CONSTRUCTION AND NO ANY AGREEMENT HAS BEEN EXUCTED BETWEEN MY CLIENT AND BUILDER. IS IT NECESSARY TO SHOW THE ABOVE PAYMENT UNDER ANNUAL INFORMATION IN INCOME TAX RETURN ? IF YES, IN WHICH YEAR IT HAS TO BE SHOWN .
01 December 2009
AIR is for purchase of property over 30 lakhs and that would take place on signing of agreement that would eventually be presented for registration or possession of the property against payment of money (even though agreement is not registered) whichever comes earlier. As builder has not got an occupancy certificate there is no way he can give you possession. However, if you enter into agreement and present it for registration, the date of the agreement you present for registration is your date of purchase even though it is presented for and gets registered later.
Individuals buying property do have a problem. They may have the income over more than one year for purchasing the property or they may have paid the advance in one year and agreement in next. The entire consideration comes in the year of agreement and usually under CASS system such cases get picked for scrutiny. You will have to go with your previous years returns also and prove that the funds were there or paid in advance. The property Registrar will file AIR when you present the documents for registration.
It will have to be seen whether payment of consideration with a receipt that it is towards purchase of the flat can be considered as purchase based on allotment letter. During amnesty schemes I have seen interest being levied by registrars from the date of allotment letter itself as if the allotment letter has created a right to receive the property. Fo AIR we will have to see if such similar writings can be construed as purchase.
CAclubindia
