Legal form of ditrtbuting income
ANAMIKA SINGH
(Querist) 16 March 2014
This query is : Resolved
hallo,my brother in law has got a gas agency under rgglv of indian oil,now for the construction of godown the house which is on my father in laws name is going to be broken,can any legal document be made so that whatever income is made may be distributed between the two brothers i.e between my husband and brother in la plz help as soon as possible.....
sir,the house is on my grand mother-in-laws name and she is alive now
Anirudh
(Expert) 16 March 2014
The house (which is proposed to be broken) is in whose name? Whether the said property is the self-acquired property of that person? Please clarify before any answer could be given to your query.
ajay sethi
(Expert) 16 March 2014
answer queries raised by Mr ANirudh
Rajendra K Goyal
(Expert) 16 March 2014
Query raised by the expert Anirudh ji need to be replied.
R.V.RAO
(Expert) 17 March 2014
pl. answer the LCI experts query above.
Meanwhile iam giving below my legal views.
If ,the said property (in the name of your FIL) is your FIL's self acquired property,he has the legal right to transfer/will /dispose/gift the property as he likes.
if FIL does not want to do any such thing now,he can allow house to be reconstructed into godown in his name, and the rentals or any future benefits of reconstructed property accrue to him and also get taxable in his hands.if he is senior citizen,he is tax exempt upto Rs2.5 lacs annual income per year.
Alternatively,FIL can by regd. Gift deed transfer house to the joint names of his 2 sons .
There is no gift tax liability between father and sons.only regn.fees and stamp duty( which vary from state to state) are payable, which pl.find out from SRO.
Both the sons,(since they got house gifted in their names and being legal owners) can construct the new gas godown in their joint names and enter into a stamped and legally binding business sharing agreement to share the incomes and expenses of the new gas agency, in whatever ratio they agree mutually.
still better if both sons (your BIL and husband) can form a regd.partnership business to avoid any future legal disputes due to themselves/their families/ their legal heirs.
if the property is the ancestral property/joint family property of your FIL (and not self acquired property as discussed above),then all legal heirs (if any) in addition to his 2 sons stated above are entitled to equal share in the ancestral property including female legal heirs.the legal heirs can seek partitioning of ancestral property at any time as they like.once partitioned or distributed the ancestral property becomes the self acquired property of each of the legal heirs to whom it is distributed.
Rajendra K Goyal
(Expert) 17 March 2014
Within the given information, good advise from expert RV RAO ji.
R.V.RAO
(Expert) 17 March 2014
Thnaks. sri rajendra goyalji.
T. Kalaiselvan, Advocate
(Expert) 18 March 2014
Mr. R.V. Rao has strained to give a very elaborate and lengthy reply to a vague query by the author. The query is devoid of facts warranting a proper opinion. Let she first clarify the questions raised by Mr. Anirudh.
R.V.RAO
(Expert) 18 March 2014
Thanks. Thiru kalaiselvanji.
ANAMIKA SINGH
(Querist) 28 March 2014
tnanks sir,actually the house is on my grand mother-in-law name and she is alive now...
R.V.RAO
(Expert) 28 March 2014
so, the word "FIL " in my reply be substituted with the words "grand mother in law" .
If the grand mother in law is mother of your FIL, still the property is not ancestral.
As she is alive now,she may allow necessary constructions, in her name or in name of her grand sons.
if she is super senior citizen(80 years and abov e),her tax exemption limit is Rs.5 lakhs.
ANAMIKA SINGH
(Querist) 29 March 2014
sir,actually the gas agency is on my brother-in law name and as per rules mentioned in INDIAN OIL gas agency brochure no partnership can be made,because it is for a individual person,
the contruction of godown or office is going to be made on the ancestral property,know sir i want to know that any type of aggrement or any type of deed can be made so that whatever income is made by the agency may be distributed between the two.
and i just want that in future no such dispute might arise regarding the income and so that in future my brother in law cant cheat my husband in any manner... pls give some suggestion in my favour as soon as possible.....
R.V.RAO
(Expert) 30 March 2014
godown will be made on ancestral property. business is in the name of individual(BIL.).
A regd.partnership can be formed with 2 partners.
THE partnership deed talks only about maintaining godown and sharing revenue of godown revenue,where both are equal partners 50:50,
profits and losses sharing ration 50:50.
your husband being a working partner of godown, takes care of godown maintenance,bank work,customer relations,correspondence etc... , to keep an eye on any problems in BIL day to day dealings and also help your BIL, in all outside jobs etc. for which part of profits can be taken as salary also.
partnership need not be approved by IOC ,no need even to tell them about partnership, since partnership deed does not talk about gas agency of IOL.
as far as IOC is concerned it is individual ownership business of BIL.
while all gas agency income accrues in BIL individual name,the bank account can be operated jointly by both.income can be shared by both.both are 50:50 partners.
A part of your husband earnings are mothly salary and partly profit share etc.. as mutually agreed by all family members.
Another alternative is formation of HUF by transferring the ancestral property to godown business , where all male and female members of family will be coparceners/members of the HUF.
the huf also enjoys basic tax exemption limit of Rs 2lacs .
the division of responsibilities by all members of family in the family owned business of godown maintenance will be equal.
HuF is also a legal entity like partnership.
take lawyer's help and form a huf/regd.partnership, where all family involvement and ownership/responsibilities will be self evident rather than leaving everything on one person and creation of misunderstandings that creates future problems, which may be avoided.
