I’m planning to purchase a home within the close to future. My mom is within the strategy 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 need to have authorized hassles with regard to my mom’s share within the new home as and when she passes on. What’s one of the simplest ways to keep away from future authorized points?
-Identify withheld on request
We now have assumed that your mom is the only real proprietor of the residential property. Please notice that you just can not make a purchase order utilizing the sale proceeds of your mom’s present home to purchase a home for your self. As soon as your mom sells the present home, she can be topic to capital positive factors tax on such positive factors earned from the sale of her home. Nonetheless, she can be topic to an exemption on capital positive factors tax underneath part 54F of the Revenue Tax Act, 1961, if such proceeds are invested in a brand new residential property throughout the identical monetary yr. Subsequently, your mom could think about buying a brand new residential property throughout the identical monetary yr. Thereafter, your mom could think about 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 obligation for switch by present between quick kinfolk.
By doing so, the title within the newly bought property shall vest in your title and would additionally keep away from future authorized disputes together with your brother after your mom’s demise – because the switch can be full throughout your mom’s lifetime itself. Nonetheless, your mom may additionally think about bequeathing the newly bought residential property in your favour underneath her Will – however notice that switch in your favour would solely take impact after your mom’s demise.
Rishabh Shroff is companion, Cyril Amarchand Mangaldas. Queries and views at mintmoney@livemint.com
Supply: Live Mint