Apni Law Staff asked 2 years ago
Our housing society, formed under the Karnataka Apartment Owners’ Association Act, 1972, faces a unique situation. The builder has offered us a vacant flat in exchange for our help in selling the remaining unsold units. This flat was constructed beyond the approved plan, and the builder also omitted promised facilities like open parking and a squash court, using the shared space for these extra apartments. The flat has received Katha but lacks an Occupation Certificate.
We have two questions:
1. Can our association, which is registered with the Registrar of SD and Properties but not as a formal society, legally own a flat in its name?
2. Given that we’re receiving this flat in exchange for forgoing promised amenities and accepting a smaller per capita share of common space, are there any tax implications, particularly in terms of income tax?
Best Answer
Apni Law Staff answered 2 years ago
Under Indian law, an association registered with the Registrar of SD and Properties can legally own property. However, receiving a flat in exchange for amenities and a smaller per capita share of common space could be considered a taxable transaction. Consult with a tax advisor to assess the specific implications based on the details of the transaction.
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