Land and house transfer

It may not be written in will, if income from genuine source has been used to build such house then it will get reflected in your mothers account. If it can be proved that your mother used her money to build such house then it wont be necessary to prove that it has been built by you. Further if you have any other documentary evidence say electricity connection in that house then it would be pretty clear that house existed prior to to transfer also.

In short it is not a matter of worry, there are many ways in which existence of that house prior to transfer through will can be established.

No there won't be prosecution as such.

You just need to prove that house was there before she transferred the land to by getting a letter from local government or by getting its electricity bill or the bill of the contractor who had built it or the flow of money from your grandmother account to contractor account.

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If your case is opened in search then only they can open 10 year old case otherwise they can't.

Secondly if they don't accept your plea that this house was not built by you then they can add it to your income u/s 68 of the act as undisclosed investment and impose 100% penalty.

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Dear Sir,

If they are not satisfied with your answer, then they can only impose penalties.

Further,Income tax officers can reopen tax cases for up to 10 years if search operations reveal undisclosed income and assets of over Rs 50 lakh.

- In the total cost of the house, major cost belongs to cost of the land. Get the report from the valuer mentioning cost of land and construction separately. If you are not able to proove it then you will be liable to pay tax along with interest.

Calculate the capital gain with both the options. What is the date of gift and sale ?

Please let me know if you have shown gift in your return of income of 2011?

You need to somehow prove that house existed before 2011. Otherwise penalty can be imposed upto 200% of tax sought to be evaded plus interest till date. Effectively, it coulde be equal to or more than the fair market value of the house today.

Yes, department can still levy penalty because you are not able to prove that house existed ten years before.