I am 86 years old, retired Army Colonel with annual gross pension income of 14 lakhs. I am purchasing a flat in Ghaziabad out of my PPF and other savings, the flat will be registered in the name of my son who is a US citizen. The payment will be done from a joint account held with me as the primary and my son as the secondary holder. Payments of Rs 30 lakhs have already been done. Will be it be ok if the payment of remaining 42 lakhs is signed by my son. What will be the tax liability if any in India on my son. Will there be any tax in US> Will it make any difference if I sign the cheques?
Hi
There are no income tax implications on purchasing a property. Income tax comes into play when the property will be sold.
You can register it in your son's name even though you are paying the consideration. But, make sure you do not obtain any future benefits arising from the property.
You or even your son can make the payment. No issues involved.
Dear Sir,
Since you are buying a property there is no incidence of tax. Any of you can make the payment and that should not be an issue.
However, if you are planning to use the property as an investment and if there is any income arising out of it, then that will have to be considered seperately.
Hope that clarifies.
Regards,
Nikhil
Dear Sir,
1) Owner of immovable property under income tax is different from legal owner. Under income tax, person who financed the purchase of property is deemed as owner if he will enjoy and exercise the rights over the property even though no registered document has been executed in his favour. It will be better to make all the payments from son account. Also don't receive any benefits from property on your name i.e rent.
2) Deduct TDS @1% as the consideration of the property exceeds Rs.50 lacs. You need to deduct TDS@1% on Rs.72 lacs i.e. 72,000 and deposit it within 30 days using Form 26QB.
Thanks
Hi,
It will not create any tax liability in the hands of your sons in India. We are not competent to comment on US tax laws.
It will not make any difference even if you sign the cheque.
But you need to deduct TDS@1% on Rs. 72 lacs u/s 194-IA.
There is no tax impact for your son since the money is already taxed in your hands. This is as per Indian law. If your son is earning any income from the property then it is taxable in his hands. Purchase of flat for your son doesn't have any tax impact.
Dear Sir,
Greetings for the Day!
As per Income Tax 1961, where an property is being purchased the buyer has withheld tax @ 1%(TCS) and deposit it to Govt. by filing return in form 27EQ post obtaining TAN.
The payment if made you shall be more beneficial as you will have to do the compliance only once.
However if the the payment is made by you son form 27EQ shall have to filed for you ass well as for your son and for that you will have to obtain TAN for both.
It is therefore advisable to make the payment from your a/c.
There shall be no compliance in US as no income from U.S. is being utilised in India.
Hope this resolves your queries!
Dear Sir,
Hope you are doing well !
1.It will not create any tax liability in India in the hands of your son as money is already taxed in your hands.
However, if your son is earnings any income from the property then the earned income will be taxable in his hands.
2. It will not make any difference if you sign the cheques.It is advisable that make all payments through your account.Further, you will have to deduct TDS@1% on whole purchase amount u/s 194-IA.
Thanks & Regards,
Payal Chhajed
