16 March 2016
can assessee recieve payment for sale of joint holding immovable property in any of the one account holder account?(joint holders are husband wife)
18 July 2024
In the context of selling jointly held immovable property, here's how the payment and receipt of proceeds typically work:
1. **Joint Holding by Husband and Wife:** - When immovable property is jointly held by a husband and wife, they are considered relatives under the Income Tax Act, 1961. - As per tax laws and banking practices, the sale proceeds can be credited to the joint account held by the husband and wife without any issues. Both spouses can jointly receive the payment.
2. **Joint Holders Who Are Not Relatives:** - If the joint holders are not relatives (as defined under the Income Tax Act), such as friends or business partners, there are some considerations: - **Banking Practice:** Banks generally prefer that the sale proceeds are credited to a joint account held by all joint holders. - **Tax Implications:** From a tax perspective, each joint holder is individually liable to declare their share of the capital gains in their income tax returns. - **Cheque in Any Holder's Name:** The cheque for the sale proceeds can typically be issued in the name of any one of the joint holders. However, for compliance and clarity, it's advisable that the cheque is issued in the name of all joint holders or in the name of the primary account holder of the joint account.
3. **Handling Sale Proceeds:** - It's essential to maintain proper documentation and records of the sale transaction, including the agreement, sale deed, and receipt of payment. - If the cheque is issued in the name of one joint holder, they can deposit it into the joint account held by all joint holders. - Each joint holder should ensure they can account for their share of the sale proceeds appropriately in their income tax returns.
### Conclusion: - If the joint holders of immovable property are relatives (such as husband and wife), the sale proceeds can be credited to their joint account without issues. - If the joint holders are not relatives, while a cheque can be issued in any one holder's name, it's advisable to deposit it into a joint account or handle it as per the agreement between the joint holders. - Proper documentation and compliance with tax laws are crucial to avoid any issues regarding the receipt and declaration of sale proceeds.
For specific details and to ensure compliance with all legal and tax requirements, consulting with a qualified tax advisor or legal expert would be beneficial. They can provide guidance tailored to the specific circumstances and ensure smooth handling of the transaction.
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