I’m planning to purchase a home within the close to future. My mom is within the means of promoting a home she owns. Is it doable for me to make use of the proceeds from the sale to purchase a brand new home? Will I’ve to incorporate my mom as a purchaser within the buy? My father has handed away and I’ve a youthful brother. I don’t wish to have authorized hassles with regard to my mom’s share within the new home as and when she passes on. What is one of the simplest ways to keep away from future authorized points?
-Name withheld on request
We have assumed that your mom is the only real proprietor of the residential property. Please be aware that you simply can not make a purchase order utilizing the sale proceeds of your mom’s present home to purchase a home for your self. Once your mom sells the present home, she could be topic to capital good points tax on such good points earned from the sale of her home. However, she could be topic to an exemption on capital good points tax below part 54F of the Income Tax Act, 1961, if such proceeds are invested in a brand new residential property inside the similar monetary yr. Therefore, your mom could take into account buying a brand new residential property inside the similar monetary yr. Thereafter, your mom could take into account transferring the newly bought home in your favour by the use of a present inside a span of three years of such buy. Such present requires a written deed which is stamped and registered. Many states in India grant an exemption on stamp responsibility for switch by present between instant kin.
By doing so, the title within the newly bought property shall vest in your identify and would additionally keep away from future authorized disputes together with your brother after your mom’s demise – because the switch could be full throughout your mom’s lifetime itself. However, your mom may additionally take into account bequeathing the newly bought residential property in your favour below her Will – however be aware that switch in your favour would solely take impact after your mom’s demise.
Rishabh Shroff is associate, Cyril Amarchand Mangaldas. Queries and views at [email protected]
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