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How to handle this case

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How to handle this case

Last updated: July 16 2009
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  • How to handle this case

    Hi All,

    Well my query would sound very stupid and lengthy but please go thru my below situation

    I am an NRI. My father had (an additional) more than 7 years flat which he wanted to sell off in 2007. But he was not getting buyers to meet his expected price for the old flat. His idea was to sell this and book a flat in a project which was at a location of his liking to spend the retired part of his life.

    I was myself in need of a house back home so I agreed with dad that i will pay 50% of the dad's expected price and once i complete this payment dad will transfer his old flat to me (we being 2 brothers our logic was that I anyway inherit the 50% of that old flat, so i needed to pay the balance 50%)

    The above was agreed in mid 2007 in good faith without any write up and i have completed my promised amount last month by regularly remitting in small amounts to his (dad's) account starting Jan 2008.

    In the meantime dad did book into his desired project (off-plan and currently under development) and paid some amounts remiited by me as payments towards the new project as and when they became due

    - Now the next question is how to have the paper work completed for the old house?

    - Will it be treated as a sale or a transfer (our case is a mix of both, 50% inheritted and 50% bought)

    - What value to be entered in the sale and purchase agreement (only the 50% which i paid or expected price of dad for the house)

    - How to treat the money remitted by me over 2 years from income tax point of view. Please note that my dad is retired for past 6 years and is not filing returns anymore

    - Is there a need to make a back dated agreement of the intent of 2007 in order that my dad is not in Income Tax troubles with respect to the money i was remitting for 1.5 years as agreed?

    My dad is trying to find a civil advocate for advice but would be really helpdull if I could get some guidance from you all on the above situation

    Thanks for help
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