Power of allorney and income on house property
Bhaskar Dey
(Querist) 22 July 2013
This query is : Resolved
Respected Experts,
If someone sells a house through Power of Attorney, and if the Attorney rents it, who will be accountable for paying Income on House Property? The Executor or the Attorney?
Thanks in advance,
Regards,
B.Dey
Advocate M.Bhadra
(Expert) 22 July 2013
In this case as mentioned by you it is the obligation of the principal/owner to compute capital gain on sale of property and pay the tax liability thereon. In no way the buyer will be responsible for the statutory obligations of the seller. However, in case the seller is a non resident as per the provisions of the Income-tax Law and there is some default, the Income-tax Department have the power to deem u/s.163 of the Income-tax Act, the power of attorney holder as "Agent of Non-resident". Once a person is deemed as agent , it is possible that the Income-tax Department may pursue the case against such agent in respect of defaults committed by the principal/non-resident.
Rajendra K Goyal
(Expert) 22 July 2013
Agree with experts Devajyoti Barman and Advocate M.Bhadra ji. Nothing more to add.
Bhaskar Dey
(Querist) 23 July 2013
Thank you so much -- all of you,
Regards
prabhakar singh
(Expert) 23 July 2013
NO VALID SALE CAN TAKE PLACE SIMPLY BY A POA
SO UNLESS ATTORNEY GETS EXECUTED A SALE DEED IN HIS FAVOR,THE PROPERTY WOULD REMAIN OF OWNER AND INCOME GENERATED THEREFROM WOULD BE TAXABLE IN THE HANDS OF OWNER AND NOT IN HANDS OF POA(WHO WOULD BE SIMPLY LIABLE TO ACCOUNT FOR TRUE INCOME TO THE OWNER).
Bhaskar Dey
(Querist) 24 July 2013
Excellent reply from Mr. Prabhakar Singh. Now everything is clear to me. Thank you so much.
Regards,
B.Dey
