My aunt ( my father sister) sold agriculture land that's in her name .She didn't want to take money in her account. So She decided to insisted the buyer to credit the entire amount to my account instead of transferring to her own account and buyer did the same. I wanted to know is there any pending tax liability is on me by credited such amount . Let me know if yes than how can I get exempt From it. If no than who had to pay the capital gain tax. Please send your valuable feedback in details .
Hi
If the agricultural land was in rural area, there is no capital gain tax liability. But, if it is in urban area, then your aunt was supposed to pay capital gain taxes.
As far as your income is concerned, consider it as a gift. Prepare declarations between you and your aunt stating receipt of such money as gift.
There is no capital gains on sale of agricultural land, if it is not within municipal limits.
The money received by you is gift from her. As she is your father's sister, the gift from her is also not covered u/s 56 as other income. Thus there is no tax liability, but pl. do ensure that the land sold is an agricultural land as defined under the Income Tax Act.
You can treat the money received from Aunt as a loan and repay the same via banking channel.
Further, it is imperative to make a written loan agreement in this case explaining all the relevant facts.
Please feel free to call/ revert in case you need more clarity.
Thanks and regards
Abhishek Dugar
CA CS B.Com
Hello,
If the money is deposited in your bank account then obviously you are the one who is liable to pay tax. You will have to pay tax as per your income tax slab rate (which will depend on the amount deposited in your bank account)
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, FCA, LLB, CERT. FAFP
Dear sir
The amount you received in your bank account is taxable under income from other source .
The way through you can exempt is first transfer the amount you received to your AUNT account and after that
told to your aunt to transfer the same amount to your father account after the amount received in your father account told your father to transfer the same amount in your own account .
BY THIS PROCEDURE YOU CAN SAVE YOUR TAX
Hi,
Sale of agricultural land is exempt from tax. However, your aunt owned the land and it is exempt in her hands. You, having received the money, should prove that you received it on her behalf and is not your income. You can transfer it to her account the entire amount. If you cannot prove that it was her income, then tax will be payable by you on the entire amount.
Regards,
Keerthiga Padmanabhan
M.Com., CA, LL.B
