Q. Payment for a flat paid by a non-working lady out of funds of her deceased husband & flat registered in name of major son - would the property be classified as Benami under the Prohibition of Benami property transactions act?

Question

A lady (housewife with no source of income) pays Rs.60 lakhs for purchase of a flat through cheque out of the funds from the joint bank account with her deceased husband (now the account is singly operated by her). The flat is registered in name of her son who does not contribute a single rupee towards the purchase price of the property & the stamp papers.

1. Would the above property get qualified as benami property under the Prohibition of Benami Property Transactions Act?

2. Would the answer be any different if the lady transfers the funds of Rs.60 lakhs to his son's account (as gift) & then the son pays for the flat from his bank account?

3. Which of the above two options (at point no.1 or at point no.2) is advisable / better explainable in case of a scrutiny?

Answer 1

The above said transaction should not be a benami transaction by virtue of definition of Benami transaction given in section 2 subsection 9 of the Benami law