ITR
Notice about a property purchase seen in AIS
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Facts
Property registrations above the reporting limit are reported to the department and appear in AIS. The officer wants to know how the purchase was funded. If the funds are explained, there is no extra tax.
Provisions and law
- Sec 142(1) (now Sec 268(1))Officer can call for a return, accounts, documents or information before making an assessment
- Sec 69 (now Sec 103)Investments not recorded and not explained can be treated as income
- Sec 285BB (now Sec 510)Annual Information Statement
Analysis
Give a source of funds statement: home loan ₹50 lakh with the sanction letter, ₹20 lakh from savings shown in bank statements, ₹10 lakh from a co-owner spouse with her bank entries. Attach the sale deed and payment receipts. If the property is jointly owned, show each owner's share and source. Check that the value in AIS matches the deed; if not, mention it.
Conclusion
- Get the sale deed, payment receipts and loan sanction and disbursement letters
- Prepare a source of funds table by date
- Attach bank statements showing each payment
- Explain the co-owner's share and source if joint
A Savvy can do this for you
Inquiry before assessment, Sec 142(1) (now 268(1))
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