No tax benefits if property is registered on wife/daughter's name

  Mumbai: The Income-Tax Appellate Tribunal (ITAT)'s Mumbai bench recently denied a taxpayer I-T benefits due to sole reason that the taxpayer bought the new house in his wife and adult daughter's names.

In a similar case, the Delhi HC had taken a view favourable to the taxpayer. ITAT Mumbai bench, however, had to follow Bombay HC’s ruling, stating that the new property must be owned by the taxpayer or he or she must have legal title over it.

R Gavankar, the person in question sold a house which he owned jointly with his wife. I-T authorities assessed 50% of the LTGC of Rs 17.5 lakh in possession of Mr. Gavankar. His claim for deduction under Section 54 was denied. Lower tax authorities, held that to avail benefits under this section, the taxpayer must own or have the legal title of the new property going by the same rules that Bombay HC had ordered.