21 November 2009
Recently I sold a property for 20 lacs which was purchased 4.5 years back for 7 lacs. That property had my maother as first name and myself as second. I want to divert funds received from sale of the said property to a new property where first name is mine and second my wife. Can it be done?
24 November 2009
It would be treated as deemed gifts made from mother in law to daughter in law, & provisions of sec 64(1) would be attracted (i.e. part of income from such property would remain taxable in hands of mother in law as it is an indirect dift to daughter in law). Please note that as a part of tax planning, it's better to transfer funds to son firstly as transfers made to son is not attracted by clubbing provisions. Now, Son can purchase the new property with the total funds having wife name as co owner. Here, Total Income from property would be assessable to Husband only.
CAclubindia
