How to save tax for the money earned from sale of house property besides bonds and reinvesting in house property? Can I gift the entire money to my son with both of us escaping income tax?

Ans: Amount given to spouse is not an income in the hands of spouse (wife). However, income received from said amount will be clubbed in the hands of husband (gift giver) as per clubbing provisions of income tax.

Ans: Tax on capital gain arises on transfer of house property will be applicable as per the prescribed conditions and required to be shown in Income tax return. However, amount transferred to son as gift is not an income. Thus, not liable to tax.

Ans: You need to keep two things in mind -

1. Appropriate taxes need to be paid on sale of property depending upon short term / long term capital gains and
2. Upon remittance of such income (after taxes), there will be a deduction of 5% as tax collected at source (if remittances are more than INR 7 lacs), which will be refundable upon filing your tax return. This 5% is just an additional cash flow requirement that you need to be mindful of.

Ans: Your decision to gift the proceeds from selling your house to your son reflects a heartfelt gesture of support and love. As you navigate the tax implications, it's essential to consider the timing and nature of the transaction.

Regarding your first question, your son won't be liable to pay income tax on the gifted amount until he utilizes it, typically in September 2025. This postpones the tax liability until the funds are actually put to use.

Exploring alternative options, such as investing in Long Term Capital Gains (LTCG) or NHAI funds, could potentially offer tax benefits. However, it's crucial to assess the tax implications and investment suitability carefully. While these avenues may provide tax advantages, it's essential to evaluate their risk-return profile and alignment with your financial goals.

Consulting a Certified Financial Planner can provide clarity on the tax implications and help you make informed decisions aligned with your financial objectives. Remember, every financial choice carries its own set of considerations, and seeking professional guidance can illuminate the path towards wise financial stewardship.