Exemption u/s 54 (very urgent)

Tax queries 354 views 2 replies
you are requested to kindly suggest on the following: I am selling my flat and will shift to some other place. I went to a housing society where there were hundreds of bungalows and the construction is still on for another 100 bungalows. I found one vendor who is ready to resell his bungalow at a lower rate as compared to the rate quoted by promoter so i was ready to purchase it but subsequently i came to know that the property is not registered with the region's sub-registrar office. so i told him that i am not going to purchase this property unless you register it. But the vendor is saying that there is a provision to nominate before taking possession of the property and the promoter will charge 2% fees on the assessable value for the transfer. So through deed of nomination he will transfer all the rights and benefits to me out of love and affection. The problem is that sale deed will be directly executed between I and promoter and the consideration will be discharged to third party who is nominating through deed of nomination out of love and affection. will i get exemption u/s 54 of the income tax act, 1961? And moreover i think that i will be taxed on the circle rate u/s 56(2)(vii) of the income tax act, 1961 as it is transferred out of love and affection.
Replies (2)

Not very convincing. Wait for others to reply.

Contact a good property lawyer to understand the intricacies of such a document. Not only the promoter/builders, but also the real estate agents are not trustworthy. They compel to enter into a property deal making superficial documents which usually ends up in court. 

Dear Saurabh,

You cannot receive gift from a non-relative. If the person nominating you is not your relative and he nominates you than the value of property received by you will be taxable in your hands.

However in my opinion you should be eligible for the benefit u/s 54 because in substance there is a purchase of new house property, which satisfies the condition u/s 54.

 

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