Are Bills for Construction of House necessary?

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  1. ACHINTYA CHAUDHURI

    ACHINTYA CHAUDHURI New Member

    I along with my wife took HBA from bank .
    She is the co-owner of property as per Registered Sale Deed of the house .
    In my return i claimed deductions u/s 80 & 24 .
    Now we are going to sale the property and as per indexed value Long term capital gain will be in negative .

    My query is :-
    1)
    i) Will sum paid for interior painting , fittings , fitting grills and gates be treated as cost of improvement and in that case need to be supported by bills , though all payments were made through cheques.
    2)
    i) If I ask the purchaser to issue cheques in the name of my wife ( 50% of transfer price ) , will it be treated as gift from me and income arising therefrom be clubbed with my income .
    ii ) Else if I transfer part of the consideration through cheques will it be treated as Gift and income therefrom be clubbed with my income .
    Thanks
    A.CHAUDHURI
    dt-31/10/2014
     
  2. gaurav_kumar

    gaurav_kumar Well-Known Member

    1. Yes, the expenses mentioned by you would be treated as Cost of Improvement. Bills for such would be required irrespective of whether the payment is made in Cash or Cheque.
    2. As per the facts stated by you - she is already the co-owner and therefore the sale proceeds should be received by both of you.
     
  3. ACHINTYA CHAUDHURI

    ACHINTYA CHAUDHURI New Member

    THANK U
    To my perception option no(ii) i.e. all cheques are issued by purchaser in my name and then I transfer her share that may attract clubbing of income ( from income arising from Gift to spouse) .
    Thank you again .
    A.CHAUDHURI
     
  4. gaurav_kumar

    gaurav_kumar Well-Known Member

    At the time of registration of sale deed, it would be required to be mentioned how much amount has been paid to which co-owner along with the cheque no.'s and other relavant details.

    Therefore, it is better to receive payments directly in the name of your wife as she is the co-owner.
     
  5. ACHINTYA CHAUDHURI

    ACHINTYA CHAUDHURI New Member

    THANK YOU A LOT.
    A.CHAUDHURI
     
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