New Delhi, Oct. 13 -- Purchasing real estate in the name of a spouse, child, or parent remains a widespread strategy for family financial planning and asset distribution across India. However, property transactions in which the individual funding the purchase differs from the person listed on the sale deed are increasingly under close examination by tax authorities. In specific situations, such arrangements can trigger severe legal proceedings under the benami property legislation.

While a familial relationship does not automatically render a transaction illegal, it offers no blanket immunity. Tax officials determine whether an arrangement fits statutory exceptions or raises legal red flags based on funding sources, ownership framing, an...