purchase of property under Power of attorney
8 months ago
Builder wants to give me Power of Attorney of the plot so that I can construct the house within time limit is it acceptable to income tax deptt for capital gain exemption or not.
A.Dear Client,
Capital Gain Tax liability is computed on the consideration value of the sale and purchase of immovable property. In the real estate business, a builder enters into a joint development agreement with the Owner who executes a POA in favour of the Builder for the construction of the building. So, an attorney cannot execute a POA in favor of another attorney for the construction of the building as per the approved building plan. So, you need to discuss the issue with an Advocate and CA for further clarification and steps.
Capital Gain Tax liability is computed on the consideration value of the sale and purchase of immovable property. In the real estate business, a builder enters into a joint development agreement with the Owner who executes a POA in favour of the Builder for the construction of the building. So, an attorney cannot execute a POA in favor of another attorney for the construction of the building as per the approved building plan. So, you need to discuss the issue with an Advocate and CA for further clarification and steps.
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A.Dear Client,
I would like to inform you that the acceptance of Power of Attorney (POA) for a plot by the Income Tax Department (ITD) for the purpose of capital gain exemption depends on several factors. It is important to note that I can provide general guidance based on existing laws and regulations, but it is always recommended to consult with a qualified tax professional for specific advice related to your circumstances.
In general, the ITD considers the ownership of the property for determining capital gains exemptions, rather than the holding of the POA. The sale of a plot or property must meet certain conditions to be eligible for capital gains exemption, such as reinvestment within the specified time period, compliance with the provisions of Section 54 or Section 54F of the Income Tax Act, 1961, and others.
If you are holding the POA and constructing a house on the plot within the specified time limit, it may not necessarily impact the eligibility for capital gains exemption. However, it is important to ensure that the necessary legal formalities are followed, including registering the POA, complying with construction regulations, and fulfilling the conditions as per the relevant sections of the Income Tax Act.
To have a clear understanding of the implications of holding a POA and its impact on capital gains exemption, it is advisable to consult with a qualified tax professional or a lawyer specializing in income tax matters. They can review your specific situation, assess the relevant legal provisions, and provide you with accurate advice tailored to your circumstances.
Thank you.
I would like to inform you that the acceptance of Power of Attorney (POA) for a plot by the Income Tax Department (ITD) for the purpose of capital gain exemption depends on several factors. It is important to note that I can provide general guidance based on existing laws and regulations, but it is always recommended to consult with a qualified tax professional for specific advice related to your circumstances.
In general, the ITD considers the ownership of the property for determining capital gains exemptions, rather than the holding of the POA. The sale of a plot or property must meet certain conditions to be eligible for capital gains exemption, such as reinvestment within the specified time period, compliance with the provisions of Section 54 or Section 54F of the Income Tax Act, 1961, and others.
If you are holding the POA and constructing a house on the plot within the specified time limit, it may not necessarily impact the eligibility for capital gains exemption. However, it is important to ensure that the necessary legal formalities are followed, including registering the POA, complying with construction regulations, and fulfilling the conditions as per the relevant sections of the Income Tax Act.
To have a clear understanding of the implications of holding a POA and its impact on capital gains exemption, it is advisable to consult with a qualified tax professional or a lawyer specializing in income tax matters. They can review your specific situation, assess the relevant legal provisions, and provide you with accurate advice tailored to your circumstances.
Thank you.
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