Can Parents pay to Builder and get property registered on Daughter\'s Name

[vasu123]

Hi,

Can Parents pay DD/Check to Builder and get Apartment Registered on Daughter's name. Daughter has been living in usa from 3 years on visa and daughter went to india for visiting. will there be any issues in future in this approach.

Daughter has NRO account but always has less than 1 Lakh rupees in it. If parent transfer amount to daughter's NRO account as gift and then Daughter pay to builder with her check then i think she needs to report that in USA right since it is more than $10K? she does not want to deal with all these reporting stuff.

please suggest. Thanks.

[whatisthepoint]

Hi,

Can Parents pay DD/Check to Builder and get Apartment Registered on Daughter's name. Daughter has been living in usa from 3 years on visa and daughter went to india for visiting. will there be any issues in future in this approach.

Daughter has NRO account but always has less than 1 Lakh rupees in it. If parent transfer amount to daughter's NRO account as gift and then Daughter pay to builder with her check then i think she needs to report that in USA right since it is more than $10K? she does not want to deal with all these reporting stuff.

please suggest. Thanks.

I think you can register in anybody's name. Doesn't matter who pays..
if not, you can always get in your parents name and do a gift Deed. No need to pay registration fees.

No need to report in USA. But safe to do a gift deed as inherited asset is not taxed in US.

[sc2364]

There are generally stamp duty plus gift deed taxes when you register as a gift deed at the sub registrar office. The amount generally comes to around 2% of the government value of the property. This was the case atleast in sub registrar office in Hyderabad from what i recall. Also, the document writers will charge some money and also a whole day/two are wasted at the registrar office. If possible, register on the name that you want the property to belong to. Hope this helps.

From a taxes perspective, inheritance etc.. please consult others as i am not knowledgeable in that area.

[vasu123]

There are generally stamp duty plus gift deed taxes when you register as a gift deed at the sub registrar office. The amount generally comes to around 2% of the government value of the property. This was the case atleast in sub registrar office in Hyderabad from what i recall. Also, the document writers will charge some money and also a whole day/two are wasted at the registrar office. If possible, register on the name that you want the property to belong to. Hope this helps.

From a taxes perspective, inheritance etc.. please consult others as i am not knowledgeable in that area.

Hello sir, It is new purchase(not transfering property from parent to kid) so Gift deed and all is not applicable here. Question is: can parent pay to builder and mention payment amount in sale deed then get property registered on daughter’s name? If Tax people ask in future about how payment was done then can she say her father paid for it? Any issues in it.


i am not looking for any Gift Tax info because i know there is No Gift Tax in USA if usa resident receives Money or property as gift from Non-Usa resident(parent or relative). But if Gift cash is more than $100k then need to do gift receiving reporting paper work (just reporting, not paying taxes on gift amount). I am not sure if any gift reporting is needed when we receive property in india from parents in india as gift.

[nova2blr]

Hello sir, It is new purchase(not transfering property from parent to kid) so Gift deed and all is not applicable here. Question is: can parent pay to builder and mention payment amount in sale deed then get property registered on daughter?s name? If Tax people ask in future about how payment was done then can she say her father paid for it? Any issues in it.

Get it registered in parents name and execute a gift deed to gift it to daughter :) win-win

[sc2364]

Hello sir, It is new purchase(not transfering property from parent to kid) so Gift deed and all is not applicable here. Question is: can parent pay to builder and mention payment amount in sale deed then get property registered on daughter?s name? If Tax people ask in future about how payment was done then can she say her father paid for it? Any issues in it.


i am not looking for any Gift Tax info because i know there is No Gift Tax in USA if usa resident receives Money or property as gift from Non-Usa resident(parent or relative). But if Gift cash is more than $100k then need to do gift receiving reporting paper work (just reporting, not paying taxes on gift amount). I am not sure if any gift reporting is needed when we receive property in india from parents in india as gift.

From my understanding, you can always buy a property in kids name or spouse name and do not need to be a joint owner. You can mention the demand drafts on the sale deed that have been taken which will reflect the father as the one that took these demand drafts. Keep the copies of demand drafts for records. If you are buying on mothers or fathers or siblings name then it needs to be a joint purchase because of the benami act. You should be able to confirm this pretty quickly if you just give a call to a real estate lawyer in the city you are buying the property. Please consult a real estate lawyer as well. Hope this link helps. http://www.dnaindia.com/business/report-benami-act-buying-property-in-mother-s-name-can-land-you-in-jail-for-7-years-2301870

[sc2364]

Get it registered in parents name and execute a gift deed to gift it to daughter :) win-win

Gift deed will cost 2% to 2.5% to register the deed at the sub registrar office. Seems like gift deed is not the approach he wants to take.

[vasu123]

Get it registered in parents name and execute a gift deed to gift it to daughter :) win-win

That is double work to go to Sub registrar office two times. Gift Deed has to be registered again. If Parent pay bank check to builder and get it registered on daughter's name, what are the issues in it? if there are no issues with this then will do it.

[nova2blr]

Gift deed will cost 2% to 2.5% to register the deed at the sub registrar office. Seems like gift deed is not the approach he wants to take.

If the donee (receiver of the gift) is within the immediate family (which is the scenario that OP is talking about), the additional registration doesn't arise. Based on Karnataka stamp duty rules, Gift Deed for a for property situated within BMRDA/BBMP/ City Corporation limits to a family member only costs
Rs.5000 + Surcharge + Cess + Rs.1000. There is no additional registration/stamp duty that you may pay during the first registration or if donated to non-family member.

Link to official Karnataka rules from Govt of Karnataka website: http://www.karnataka.gov.in/karigr/Pages/-At-a-Glance--Stamp-Duty-and-Registration-Fee.aspx
Checkout: 13(ii) scenario

[nova2blr]

That is double work to go to Sub registrar office two times. Gift Deed has to be registered again. If Parent pay bank check to builder and get it registered on daughter's name, what are the issues in it? if there are no issues with this then will do it.

If the daughter cannot go for the gift deed registration, she can execute a Power of Attorney to execute the gift deed on her behalf. The registration will be done in her name. See my response to sc2364 on the charges for a gift deed to a family member.

Good Luck.

PS: It may be a simple consultation with a lawyer to validate this.