Hi,
Asking this for one of my friend. He has a hearing from income tax dept on non payment of tax for an amount of 20lakhs which was cash deposited on his bank account in 2010.
Amount was actually deposited after an ancestory property sale done by his father. He got12 lakhs as gift from father and remaining 8l amount he gave back to his mother. He was blissfully unaware of any tax implications for this. He used the 12 lakh for Prepayment of his existing home loan.
Now dept is asking for the proof regarding various transactions. There is a sale deed between his father and the buyer , but the amount is only 10lakhs mentioned in the papers.
Now
1. What is the tax that he would have to pay for this ? What is the tax rate ? I read somewhere that its either 10percent or 20 percent after indexation. now since this is ancestral property, how is this calculated? Who ultimately has to pay the tax – him or father or mother?
( father and mother are non working and dont file tax returns)
2. what is the penalty if any?
3. What other proofs will be required to present the case apart from sale deed?
Please advice on the legal methods that can be adopted for this.
Regards
Hema