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LONG TERM CAPITAL GAIN ON HOUSE

DHANSU IDEA (Accountant) (21 Points)

18 April 2025

Dear Sir/Experts

I want to ask the question regarding properties, property is on one name ,now the owner wants to sell it. Owner wants to get a check ( from the buyer ) on other family members. Is it possible? What kind of a Tax implication will arise in future? The amount is around 10 Lacs only.

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Rama chary Rachakonda (Master in Accounts & high court Advocate email ID:ramachary64@gmail.com voice no:9989324294) (7320 Points)
Replied 18 April 2025

Property Sale and Payment to Other Family Members The property owner can request the buyer to issue a check in favor of other family members. However, this arrangement may have tax implications: - *Gift tax implications*: If the property owner gifts the amount to family members, it may be considered a gift and subject to tax implications. - *Income tax implications*: If the family members receive the payment as income, it may be subject to income tax. Possible Scenarios 1. *Gift*: If the property owner gifts the amount to family members, they may need to file a gift deed and pay applicable stamp duty. 2. *Loan or advance*: If the property owner lends the amount to family members, they may need to document the loan agreement and consider interest implications. 3. *Family arrangement*: If the property owner and family members have a family arrangement, they may need to document the agreement and consider tax implications. Tax Implications The tax implications will depend on the specific arrangement and the tax laws applicable. The property owner and family members should consider: - *Income tax*: Tax implications on the receipt of the amount by family members. - *Gift tax*: Tax implications on gifts made by the property owner to family members. Recommendations 1. *Document the arrangement*: Clearly document the arrangement between the property owner and family members. 2. *Consult a tax professional*: Consult a tax professional to understand the tax implications and ensure compliance with tax laws. 3. *Consider alternative options*: Consider alternative options, such as distributing the sale proceeds after receiving the payment. By understanding the tax implications and documenting the arrangement, the property owner and family members can ensure compliance with tax laws.

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SUSHANT BIDAYE (599 Points)
Replied 18 April 2025

I dont know the purpose behind taking check in another name.

If the intention is to gift, there will be implications of section 56 in the hands of receiver.

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