Want to sell house. It still not registered but have builder buyer agreement.
1 min read 06 Aug 2021, 09:23 AM ISTAs far as credit for tax is concerned, there is provision in the ITR form where you can claim the credit for tax deducted in the name of your wife and is reflecting in her form no, 26AS
PremiumI am selling off my house which is still not registered but I have the Builder Buyer Agreement. For ease of succession, I had included my wife in the agreement but the whole property has been paid by me alone. Now the buyer is paying me in two names- in my name and another in my wife's name. I have requested them pay the full amount on my name only as have paid for the property. The buyer says this can have legal complications later if my wife later says that she has not received her share.
I shall deposit both the cheques in our joint account. Would there be any issue from tax department later? is it OK to accept half the money in my wife's name and half in my name from the buyer? I also want to understand how do I claim the TDS which the buyer will deduct as the agreement value is 1.25 Crores?
If the buyer is apprehensive about any issue arising in future, both of you can execute an indemnity bond in favour of the buyer with a promise to indemnify the buyer if the entire consideration is paid to you. Alternatively, you can have a specific clause in the sale agreement mentioning the fact that the property was fully funded by you and the wife was made a joint owner for the purpose of succession only. Since your wife will also sign the agreement, she cannot claim later on that she did not receive her share in the sale consideration.
However even if the buyer does not agree to it, you can still go ahead with the deal and deposit the full payment in your joint bank account. There would not be any problem from income tax department as long as you are able to prove that the property was fully funded by you and name of your wife was included for the purpose of succession. Since you are including full capital gains in your income, there is no reason for the income tax department to object to it. As far as credit for tax is concerned, there is provision in the ITR form where you can claim the credit for tax deducted in the name of your wife and is reflecting in her form no, 26AS.
Balwant Jain is a tax and investment expert and can be reached at jainbalwant@gmail.com
