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Taxation on Registered POA for immovable property

412 views 1 replies

Aashish

CA Job

45 Points Posted on 02 February 2011

Hi,

MR A is issuing and registering POA in favour of Mr B and as i understand Mr A will not be able to sell the property and later when B sells the property the money will be given to B

in this how is taxation for A and B to be done ? how is duration ascertained and how is capital gain ascertained

regards

Replies (1)

siri

CFO

174 Points Posted on 03 February 2011

if a person acquires a property under a "Power of attorney Transaction" by satisfing the conditions of section - 53A of the Transfer Of Property Act, he is deemed as owner of the property, although he may not be the "registered Owner" of the Property.

cnditions of sec.53A of the "Transfer Of Property Act" :-

(i) There is an agreement in writing b/w the purchaser & the seller.

(ii) the purchaser has paid the consideration or he is ready to pay the consideration ( if there is no consideration as in the case of gift, then sec. 53A of the Transfer of Property Act is not applicable).

(iii) The Purchaser has taken the possession of the property..

if all the above 3 conditions are satisified then mr. B is treated as Deemed Owner eventhough he may not be a registered owner of the property. then capital gains will be calculated in the hands of Mr.B

if POA is not for consideration then MR.B is not owner of the property. then, capital gains will be calculated in the hands of the Mr.A.