Property Planning at 70: A Will, A Co-owner, or A Tax Tangle?
Query 1]
I am in the process of buying an apartment and registering the same in my name as well as my wife’s name. I have a few queries regarding the same.
1.I have only one son. Is it advisable to add his name in the registration, because we both are 70 and above.
2.As my son is an Income tax assessee, would it make any difference in his financial stature?
3.Is it necessary for him to declare this property in his IT returns although his name will be third in the registration?
4.Lastly, which is better: a Will or adding his name in the registration document, so that he can acquire the property after us? [nharirajiyer@gmail.com]
Opinion:
Congratulations on this new chapter! Buying a flat at 70 isn’t just a financial transaction — it’s a declaration that life is still being planned! And now that you’re at it, why not throw in a bit of succession planning to keep things smooth for the next generation? Let’s decode your concerns one by one:
1.Should You Add Your Son’s Name in the Property Registration?
You can, but should you? That’s the million-rupee question. Mere inclusion of the son’s name as co-owner in the sale deed does not bypass the usual succession formalities for the parents’ or spouse’s share. If the idea is to make inheritance smooth, then no — don’t include his name. Instead, execute a Registered Will after purchase. It’s simpler, flexible, and saves future complications.
2.Impact on Your Son’s Financial Stature:
Technically, no — if he’s not putting money in, it won’t impact his tax liability. However, since his name appears in a property document, it may enhance the financial net worth disclosures — like when applying for visas, bank loans, etc.
3.Is He Required to Declare the Property in His Income Tax Return?
If he’s a co-owner (even third-named), and if the ITR form demands it (say, income > ₹ 1 Cr or if business books are maintained), then yes — disclosure is expected. But if there’s no income from the property (say, it’s self-occupied), then generally no tax consequences arise. In case of rental income, he can declare zero share— provided it’s clarified that the beneficial ownership lies only with you and your wife.
4.What’s Better — Adding Him or Writing a Will?
Hands down — Registered Will wins! Here’s why:
a) You retain full control over the property.
b) You can change the Will anytime.
c) No stamp duty or registration costs (unlike Gift Deeds).
d) No unintended legal or financial consequences for your son.
Final Advice:
Buy the property in your and your wife’s name. Draft a clear, registered Will leaving it to your son. This keeps things legally strong, tax-smart, and drama-free.
Query 2]
I have sold one house property purchased in Jan-2000 for ₹ 6 Lakh & sold it in March 25 for ₹ 35 Lakh. The market value as per sale deed is ₹ 37.50 Lakh. I wish to purchase another property. Presently, I had deposited the entire amount of 35 Lakh in a capital gain account on 30/03/25. I am a salaried person. My queries are
1.Whether I have to show this transaction in the AY 25-26 while filing my return or after purchasing another property within 2 year?
2.Which return is to be filed and how to show this transaction in return?
3.Whether tax on above sale is to be paid during AY 25-26 ? [Anil T – taaniel2006@rediffmail.com]
Opinion:
First of all — congratulations on the sale! Turning ₹6 lakh into ₹35 lakh sounds like a windfall, but truth be told, over 25 years, that’s not quite a stock market thriller. Still, a house is more than numbers – it’s a roof over your head, a box of memories, and forgotten Diwali lights. Now let’s turn to the taxman’s side of the story — and see how to navigate your capital gains, the Capital Gain Account Scheme (CGAS) and your upcoming ITR.
1.Do You Need to Show This in Your Return for AY 2025–26?
Yes, absolutely! The tax department doesn’t operate on “let’s wait and see.” The transaction happened in FY 2024–25, so declare it in the return due for AY 2025–26, even if you plan to reinvest.
2.Which ITR Form and How to Show It?
ITR-2 is your match, since you’re a salaried taxpayer with capital gains. In the “Capital Gains” schedule (i) Mention Sale Price: ₹35 lakh (ii) Stamp Duty Value: ₹37.50 lakh [Since ₹37.50 Lakh is only about 107% of ₹35L i.e., less than 110%, Section 50C won’t trigger any tax adjustment and tax would be required to be computed on the basis of ₹ 35 Lakh only] (iii) Claim exemption under Section 54 (via CGAS deposit).
Keep proof of CGAS deposit. Treat it like you would treat your Aadhaar or marriage certificate — you may need it at some point. It’s your golden ticket in case of a future enquiry.
3.Do You Have to Pay Tax Now or Later?
Nope — since you’ve deposited the gains before filing the return (you did it on 30-03-2025), no tax is payable now. However, this isn’t a “forever free pass.” If you don’t buy a new house within 2 years or construct within 3 years, the exemption will be revoked in FY 2027–28 and the tax will come knocking again — like a forgotten friend from college asking for money back. So, the taxman is patient… but not infinitely so.
4.Bonus Observation:
a) You have deposited the amount in CGAS on 30/03/2025 whereas you were having the time up to 31st July (now extended up to 15th September) for the same.
b) You deposited₹35 Lakh – though technically only ₹ 22 Lakh (the gain) needed to be protected.
Final Words:
Think of the Capital Gains Account like a parking lot — not a garage. Report the transaction honestly in AY 2025–26, claim the exemption properly, and ensure you reinvest in a new property within the timeline. Miss the deadline, and you’ll meet Mr. Capital Gains again
[Views expressed are the personal view of the author. Readers are advised to seek professional advice before taking any decisions. Readers may forward their feedback & queries at nareshjakhotia@gmail.com. Other articles & response to queries are available at www.theTAXtalk.com]
