• Registration below circle rate

I have bought a property for 13100000 white circle rate is 16300000. Seller is not ready to accept stamp paper of 16300000 as he is from uk and is afraid of capital gains as well as Other Issue which might crop up if we write property value as 13100000 and use stamp paper of 16300000. The plot is not correct shape and is of almost triangle shape. Please advice
Asked 2 years ago in Property Law from Delhi, Delhi
1)you  may buy and sell a property at any mutually agreed price but the fact is that when you go to register the said property in the office of the sub-registrar, you would find that the official, supposed to register your property deal, would compare the sale consideration as mentioned in the sale deed with the fair market value of the property.  The rate so fixed is known as the “circle rate”. Now if the sale consideration as mentioned in the sale deed is lower than the circle rate, the stamp duty would be calculated as per the value prescribed for circle rate 

in sale deed you can mention consideration paid as Rs 13, 10.000 but when document is submitted for registration stamp duty would have to be paid at the circle rate of Rs 16, 30,000

2) for the purpose of calculation of capital gains circle rate would be taken into consideration and not the price mentioned in sale deed .
Ajay Sethi
Advocate, Mumbai
23290 Answers
1219 Consultations
5.0 on 5.0
section 50C of the Income-tax Act, 1961 clearly mentions that the liability on capital gains would arise on the value of the property as fixed by the state valuation authority .

  Thus, capital gains tax would be calculated on the value of the property as fixed by the Stamp Valuation Authority especially when such value is higher than the declared value of the property as appearing in the sale deed
Ajay Sethi
Advocate, Mumbai
23290 Answers
1219 Consultations
5.0 on 5.0
1. Properties are registered as per circle rates fixed by the Registration office,

2. You may mention anything as consideration but you shall have to pay the stamp duty as per the circle rate,

3. The capital gain for the purpose of collecting capital gain tax also will be calculated based on the circle rate,

4. There is no reason on the part of the seller not to agree for the sale since the circle rate is higher than the actual consideration paid,

5. may be the seller is trying to extract more consideration from you since it is hardly found when the consideration mentioned inthe sale deed is same as that of the circle rate.
Krishna Kishore Ganguly
Advocate, Kolkata
12118 Answers
231 Consultations
5.0 on 5.0
1. You are free to purchase or sell the property at any mutually agreed rate. However, regardless of the consideration for which the property has been sold, if it is sold for a price below the circle rate, the registration can take place only on the circle rate which in your case is 1.63 cr.

2. You have sold the property at 1.31 Cr where as the circle rate is 1.63 Cr. So you are required to pay the stamp duty at the circle rate of 1.63 cr.
Ashish Davessar
Advocate, Jaipur
18158 Answers
449 Consultations
5.0 on 5.0
1) you can mention the value of property at 1.30 crores .  If by reading the sale deed and circle rates it appears that the stamp duty paid is insufficient then matter shall be referred before registration.

2) if in opinion of sub regsitrar there is undervaluation then sub regsitrar can refer the same to the Collector for determination of the market value of such property and the proper duty payable thereon

3) in some case document is registered at value mentioned subsequently same Sub-Registrar (or his successor) sends the reference suggesting that correct stamp duty payable has not been paid
Ajay Sethi
Advocate, Mumbai
23290 Answers
1219 Consultations
5.0 on 5.0
1. Capital gains tax is calculated on the value of the property as fixed by the Stamp Valuation Authority especially when such value is higher than the declared value of the property as appearing in the sale deed. 

2. If your mention the value of property to be 1.31 cr then the sub-registrar would send the reference to the collector who would then give his opinion on the stamp duty required to be paid.

3. To compute the capital gains tax, the sale consideration as the amount mentioned in the sale deed or the value as per the circle rate, whichever is higher, will inevitably be taken into account and stamp duty would have to be paid thereon.
Ashish Davessar
Advocate, Jaipur
18158 Answers
449 Consultations
5.0 on 5.0
1. File an application before the Sub-Registrar for revaluing the circle rate of your plot of land,

2. The said Sub-Registrar may send your application to the Collector for his decision,

3. If the decision is not favorable to you, you can file a W.P. before the High Court against the decision of the Collector to fix the circle rate of your triangular plot at par with plots of normal shape.
Krishna Kishore Ganguly
Advocate, Kolkata
12118 Answers
231 Consultations
5.0 on 5.0

Ask a Lawyer

Get legal answers from top-rated lawyers in 1 hour. It's quick, easy, and anonymous!
Ask a Lawyer

Property Lawyers

T Kalaiselvan
Advocate, Vellore
14056 Answers
127 Consultations
5.0 on 5.0
Ajay Sethi
Advocate, Mumbai
23290 Answers
1219 Consultations
5.0 on 5.0
Ashish Davessar
Advocate, Jaipur
18158 Answers
449 Consultations
5.0 on 5.0
Krishna Kishore Ganguly
Advocate, Kolkata
12118 Answers
231 Consultations
5.0 on 5.0
Devajyoti Barman
Advocate, Kolkata
5223 Answers
54 Consultations
4.9 on 5.0
Rajgopalan Sripathi
Advocate, Hyderabad
868 Answers
43 Consultations
5.0 on 5.0
Atulay Nehra
Advocate, Noida
436 Answers
15 Consultations
4.7 on 5.0
Shivendra Pratap Singh
Advocate, Lucknow
2752 Answers
41 Consultations
4.9 on 5.0
Ajay N S
Advocate, Ernakulam
1916 Answers
19 Consultations
5.0 on 5.0
S J Mathew
Advocate, Mumbai
1950 Answers
65 Consultations
5.0 on 5.0