Hi, I have a flat for which all payments are done to builder but its not yet registered. I am looking to sale this property and I have found a buyer as well.The buyer would need to go for a home loan. I would like to understand the complete process and any tax liability. I understand, I will need to go for a assignment agreement (or probably this is what is called a tripartite agreement between me, builder and the buyer. I will pay the transfer charges which is 4% + GST. This agreement ideally is expected to be registered - is that correct? Since the buyer is going for a home loan... I would like to understand when the bank will be making the payment to me. Is it when the assignment agreement is going to be re-gistered, or is it when the property is going to be registered by the builder on the name of the buyer? Or will it be before the property registration but after the assignment agreement registration? From Tax perspective, I am selling the property at a very marginal difference compared to my total cost (which is total consideration in sale deed with builder+ amenities charges + water and electricity charges + car park charges and GST + transfer charges). Will my tax liability be based on this total cost... or it will only be based on the value mentioned in existing sale deed with builder. Would appreciate the clarification and details on this. Many Thanks.
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Hello,
you please talk to your builder once. The registration has not been done therefore the transfer can be done on the basis of NOC also, assignment deed or tripartite Agreement are not required.
also, the tax liability will be based on the consideration that you will get after transfer of the flat.
would finally advise you to get in touch with your builder and CA to know the exact process.
regards
1) registration of tripartite agreement is mandatory
2) you will receive payment from bank at time of registration of tripartite agreement
3) tax liability woukd be on total cost
Yes a registered tri party agreement wherein you will be the Confirming party.
See the bank can release the amount on assignment also if the construction is going on if the construction is completed OC is recieved bank will ask for the sale deed to disburse the payment.
The capital gain would be calculated upon the purchase amount and the sale price water maintenance charges wont be added though indexation will be there you CA shall calculate same for you,
Because my buyer is going to take home loan... I want to understand the complete process. Builder mentioned that I would need to give them a MoU (between me and buyer) and then go for an assignment agreement. Based on that they will issue a NoC and the bank could process loan. I want to understand if the bank will pay me immediately or will wait for the property to be registered by the buyer... or bank will or should pay me as soon as the assignment agreement is registered and from then on it will be builder, buyer and the bank that will take it forward for property registration. I don't want to get into a problem because folks from builder team may do mistakes... so would like to understand if bank should pay me as soon as builder completes the transfer process using assignment agreement... otherwise.. till the property is registered and I have received my due... how will I claim stake in this transaction. Thanks!
The bank will pay you on assignment agreement in your case the registered sale deed between buyer and the builder can be executed afterwards. You on assignment will receive the amount.
Sir the bank will hand over the DD of the consideration amount on registration of the assignment the details of the DD/cheque shall be mentioned in the deed.
You will receive the money immediately and will not have to wait till the property is registered.
regards
Once assignment agreement is registered you should insist that funds be released to you
Bank will pay when you complete the formalities with them after the registration and tripartite agreement. your tax liability will be on the consideration of present transaction.
You may have to enter into a tripartite agreement with the builder and the buyer.
It is not mandatory to register the tripartite agreement.
The builder will register the sale deed of the flat on the name of the buyer based on the said agreement.
The bank may release the loan amount only when the property has been registered on the name of the buyer and mortgaged to it as per law.
You may have to pay income tax based on the income you received out of this sale transaction and it can be treated as income from other sources.
The payment of the loan amount would generally depend on the discretion of the bank manager.
If the bank manager would insist the proeprty to be registerd on the name of the buyer for release of loan, then you may have to wait until then.
The bank may process loan on the basis of NOC but it is not necessary that they may have to make the payment immediately on the tripartite agreement has been executed among you three and a MOU has been entered btween you and the buyer.
You can clarify the details from the bank directly through the buyer in person instead of getting confused over various replies from forums as this, because the practical situation would be different from the opinions rendered by various lawyers of this forum.
Dear Sir,
You may execute a sale deed through your builder and you may act as consenting witness. You will be liable to pay tax only on the marginal profit which you may get.
