Declaration of Income on Sale of Property

Hi,

Hope you are doing well !

If the purchased and sold property value is more than Rs 30 lakh, then the authority registering the transaction has to report the details of the transactions in its Annual Information Return which contains the name, PAN, address, and amount of transaction of the purchaser and seller of the property.

So, the purchaser should disclose the source of income from which the payment for property has been made and while the seller has to ensure that they do not forget to report capital gains on the sale of the property in their Income Tax Return.

Furthermore, in case of sale of property of more than Rs 50 lakh, the purchaser deducts TDS at the rate of 1 per cent from the payment made to the seller. After deducting the TDS, the purchaser files Form 26QB with Income Tax Department in which the purchaser informs the amount of sales considerations & TDS deducted along with the names & PAN of the parties involved in the transaction.

So, Form 26QB also serves as an important source of information to the Income Tax Department for all the transactions related to the purchase of sales and property. Therefore, you should not avoid declaring such income as the department is pre-informed about it.

Thanks & Regards,

Payal Chhajed

Hi

Has the sale deed been registered?

For sale of property, capital gains shall be taxable in hands of the legal heirs. The capital gains shall be taxable in the year of registration irrespective of the fact whether payments have been received or not.

Dear Sir,

Need more information for reply such as date of agreement, reason of dispute, etc.

Thanks

Hello,

Since the sale proceedings are still going on, there is no requirement to declare income under the head capital gains. Once the registration is completed and full consideration is received, then you can file LTCG/LTCL. If the sale happened when your parents were alive, then you have to file their return as legal representative. This involves few procedures. Please clarify on this aspect.

If the registration has not been done yet, you need not disclose it in this financial year.

Please let us Know whether the registartion of the property is complete or not?

If it's not complete, then you should not show it in return. You should keep the proof of ongoing litigation.

Once the property is sold and registration is made income needs to be offered for tax and tax is to be paid on same. Receipt of sale proceeds is not the criteria.

Hi

Income to be declared in year when registration process is completed.

So you need not to declared it in AY 2018-19.

Hope it helps.