Transfer of money to father – is it taxable ?

POSTED BY Mahendrrat ON February 23, 2014 10:32 am COMMENTS (10)

Need your expert advice guidance on taxation part. My Father wants to buy a Farm Land worth Rs.25 Lakh. If I transfer Rs. 25lacs to his bank account & he uses that for the purchase of farm land.

– Will this amount considered as my Father’s income & becomes taxable income…?

– If I directly pay to Farm Land owner & execute sale deed on Father’s name will it be OK as far as income tax is concern..?

As per my understanding any amount received by relatives is not taxable at all. Could you please suggest the best way to do this transaction & avoid tax hassle.

Thanks in advance.

Mahendra

10 replies on this article “Transfer of money to father – is it taxable ?”

  1. ashalanshu says:

    Dear Mahendra, please contact me over my personal mail id for the same.

    thanks

    Ashal

  2. ashalanshu says:

    Dear Mahendra, still the property belongs to your father and your siblings may claim on the same in case your father dies with out declaring the smae in your favor under a WILL.

    Thanks

    Ashal

    1. Mahendrrat says:

      Ashal, Thanks a lot for prompt guidance.

      Thanks..Mahendrra.

      1. Mahendrrat says:

        Hi Ashal,

        Could you please share the sample agreement for Gift money OR money lending with zero % interest from Son to Father.

        Thanks in advance.
        Mahendrra.

  3. Mahendrrat says:

    Thanks Ashal.
    I have last query – What if I dont transfer money into Father’s a/c for the purchase of land & directly pay to land owner & execute purchase agreement on Father’s name.
    Any impact on law/taxation side…?
    Thanks
    Mahendrra.

  4. ashalanshu says:

    Dear Mahendra, then as of now, purchase it under your father’s name and make sure your father prepares a WILL and provide the title of this new land to you exclusively as safety for your money.

    Thanks

    Ashal

  5. ashalanshu says:

    Dear Mahendra, why are you not purchasing the land in your own name to keep the matter simple?

    Thanks

    Ashal

    1. Mahendrrat says:

      Ashal,
      I have matrimonial issues & matter is in court. Hence wanted to avoid purchase of land on my name.
      Please guide/advice.
      Thanks.
      Mahendrra.

  6. ashalanshu says:

    Dear Mahendra, from taxation point no impact on either of you. Yes being SON you can gift any amount to your father.

    Pain point – As the property is registered under your father’s name, later on your other siblings may stake a claim on it although it’s being purchased from your money. Be ready for this situation.

    Thanks

    Ashal

    1. Mahendrrat says:

      Ashal,

      Thanks for the guidance & highlighting the pain point.
      Reg. Pain point- Can I signoff any document with Father by which I can record the details of funding provided to him for the purchase of land & get signatures from other siblings as witness.
      If you can help on the draft of such documents.

      Thanks in advance.
      Mahendrra.

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