Query regarding Renting of Property purchased from Capital Gains

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  1. rohinton

    rohinton New Member

    On sale of a single owened residential property, my mother selected another residential property, being advanced aged 85 years, she thought of including her two children's names in the self funded new purchase, the son is a resident Indian, daughter is UK national born in India,
    Can the newly acquired property be put on rent ? The rent would be used to support my mother in her old age.
    I seek clarity on this, also in which section is this issue covered ?

    Many thanks,
    Rohinton.
     
  2. Dear Rohinton,
    As per your query, your mother selected another residential property after selling her single owned residential property.
    It's a bit confusing correct me if I am wrong. your mother purchased a new residential house after selling the only residential house?
    The new house is in the joint name of your mother and her two children including her NRI daughter.
    Now your query is whether your mother's newly acquired house can be put on rent - the answer is yes why not provided the income from the house property be assessed and tax is paid on time.
    The income from the house property will be taxable in the hands of your mother and her two children according the their share in the property.
    If your mother is having only one house property then the Gross annual value will be nil but if it is put on rent then tax implication will be there.
    I hope this answers your query.
     
    Neha Sharma and rohinton like this.
  3. rohinton

    rohinton New Member

    le of a single owened residential property, my mother selected another residential property, being advanced aged 85 years, she thought of including her two children's names in the self funded new purchase, the son is a resident Indian, daughter is UK national born in India,
    Can the newly acquired property be put on rent ? The rent would be used to support my mother in her old age.
    I seek clarity on this, also in which section is this issue covered ?

    Many thanks,
    Rohinton.[/QUOTE]


    Dear Narendra,

    A clarification, the new property is a resale property 9 years old & is solely to be bought from the capital gains amount kept in the capital gains account of the bank, we her children have not put our monies in it .

    Our names are to be put to the property for inheritance purpose.

    Also the property she now stays in is a very old ancestral Property inherited by her and her two sisters, one sister sold her share to my mother by executing a RELEASE DEED , making her 2/3 rd owner in the said ancestral property she is now staying in.
    You mention of tax implications re the property , please elaborate on this .
     
    Last edited: Feb 5, 2015
  4. rohinton

    rohinton New Member

    Sorry but I feel my reply is loaded fully.
    My mother now stays in a inherited property which she and her two sisters inherited over 25 years back, subsequently one sister sold her share to my mother by executing a RELEASE DEED , which was duly registered .
    You mention regarding Tax implications on this count,
    Request you to kindly elaborate on this .
    Thanks,
    Rohinton.
     
  5. Neha Sharma

    Neha Sharma Active Member

    @rohinton

    I have read your comments and the simple reply to this is that capital gains wont be levied on sale of old property as a new property has been purchased.

    And yes, she can give the new house on Rent and Income Tax would be levied on the Rent
     
  6. rohinton

    rohinton New Member

     
  7. rohinton

    rohinton New Member

    Dear Neha,
    My query is what are the Tax implications of owning / buying a second residential property, ( to fulfilling Long Term Capital Gains ) , this buy came after jointly inheriting a ancestral property 25 years back .

    Further if the recently bought property is put on rent or leave & license , will my 85 year old mother's tax returns be affected , apart from paying necessary income tax on her rent collected .
    I am made to belive that there is tax levied on the second property , how is that calculation done ? is it specifically on the second house or any one house of your choice ?

    Seeking your much valued opinion.

    Rohinton.

    Can any one house be taxed ? or only the second house is the
     
  8. rohinton

    rohinton New Member

    Dear Narendra,

    What is Gross Annual Value ?, What is this & how is it calculated, ? is it calculated on the second home or any one of the two homes that a person owns ?
    Kindly answer my query & enlightened me .
    Thanks,
    Rohinton .
     
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