Dear Sir/Madam, I live abroad and want to purchase a flat in India of 70 Lakhs. The flat will be on my father’s name. My father will pay 10 Lakhs and I will pay 60 Lakhs to builder. I have an NRO account but my NRE account is not working so i can not use it. Can I transfer directly to builder’s account? is it ok and allowed to transfer big amount with remitttance portal directly? What will be the consequences? Or I must transfer to my father’s account? What will be the problems then?
If the property is going to be on your fathers name its better to show such amount as gift to father and first transfer the amount to father and then let father purchase that property.
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Thank you.
Hi,
Hope you are doing well !!
It is advisable to first transfer the amount to father. It will be treated as gift to father.
Gifts made to parents are not taxable in their hands or in your hands. Also, clubbing does not apply for income earned on money gifted to parents. So, in case they decide to invest the money received from you, any income from such investment will be taxed in their own income tax return, and will not be clubbed with your income.
Hi
Since property would be registered in your father's name, it is advisable that you transfer the funds to your father and then your father makes the payment to builder.
Your father shall have to show such receipt as gift under Exempt Income in ITR.
Hello,
It would be advisable to transfer the amount to your father's account first as a gift, which would be exempt from income tax, and then your father can transfer the total amount to the builder since the property is being purchased in his name.
I hope that this answer satisfies your requirements.
Regards,
CA Hunny Badlani
