I am owner of a residential property in Ludhiana. Recently I have decided to sell it off and started looking for buyers. I am having a huge difficulty in coming at par in discussion with them regarding the registration of the property in the quoted amount. Example if the property is quoted at 60 lakhs from my end they wanna show on registration the minimum amount of that area in circle rate i.e. around 22 lakhs. So max people are saying 22 lakhs will be showed on registration papers whereas other amount will be given to us in cash. This is a normal practice in all property matters everywhere but we being responsible citizens want to show exact quoted price of 60 lakhs on papers. We also do not want to take around 40 lakhs in cash. We may be quoted capital gains tax in this amount but we are planning to buy some another property in another location within two years so thus I guess that capital tax will be refunded back to us. Due to these ethics of us and due to not agreeing to take max cash and wanting to do registration of property in the quoted amount only, we are having issues finding buyers because nobody wants to buy on papers on such amount but want to show only minimum circle rate of that area. Kindly help in this matter. Thanks in advance !!!
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You may either have to compromise with your policies to agree with the buyer's desire to quote a lesser rate in the registered document or wait for a honest buyer to buy this property.
Legally you cannot do anything about this especially when you are struck with your honest policy on this
Property prices are inflated because nobody has serious white money to buy property. They can buy a property only if they pay 1/3rd or half of that amount and the rest in black because their income is not that much. This is the reason why property prices are skyrocketing.
Well, your intentions are good but the society is screwed. Therefore either you sell your property at a lesser rate or take the black money.
1. wait for an equal honest buyer like you,
Most buyers have tons of black money
2) the reason why the want to show the circle rate only is to avoid paying substantial amount as stamp duty as it is basically 6 per cent on sale consideration mentioned in sale deed
3) only if buyer wants bank loan would he agree to declare entire sales consideration received by him
1. You have no options, more so since the buyer party would be shelling out more amounts in Stamp Duty, on the full market value.
2. You will need to find a Buyer party, who is ready to give full amount in cheque, in the same manner in which you would be giving full amount in cheque for your property purchase purposes for claiming LTCG.
1. Your approach is impracticable.
2. The circle rates are astronomical, and at times higher than market rate, hence people mention the consideration of sale at only the circle rate.
3. You will not get any buyers with this approach.
See you have to find legit buyer in your case as the buyer to save stamp duty may not agree to register at the price quoted.
See to sale the property ultimately you have to bargain legally nothing can be done as buyer may at first hand not agree for the deal.
They want to make payment of black money and evasion of stamp duty by showing low price in sale deed. This fraud is usual but here difference of amount is very much. Very chances of being caught red handed. 10 15 lacs difference may possible but not of this much.
But as a whole this is a crime.
It is a general practice to procure the property at base circle rate. The quote of 60 lakhs is market rate.
Thus, there will be discrepancy in the rate. Most of the buyers opt to pay base circle rate and balance un accounted.
Going by your commitment, you may have to wait to get a like minded person to dispose your property at 60 lakhs.
Generally it's circle rate which is mentioned to save stamp duty. You can buy another property as mentioned above
It seems to be a imaginary question.
You should have checked the consideration value at the time of signing the sale deed. So, you are aware that remaining amount is black money. So, you knowingly received it as black money and deposited it in the bank. You are answerable to the Income Tax. You have to contact a good auditor for giving a suitable reply to the Income Tax Department and for preparing the statement of accounts.
Why the buyer will not buy at 60 lakhs because he may have to pay stamp duty of 60 lakhs and not on 22 lakhs
If the amount is less then 22 lakhs take a example of 18 lakhs still then buyer would have to pay stamp duty on 22 lakhs only.
But in your case stamp duty has to pay on 38 lakhs rupees means if you take 5% also 1.90 lakhs amount need to pay stamp more as compared to 22 lakhs.
Here you can ask buyer that 1.90 lakhs stamp can be paid by you and deduct from 60 lakhs give some discount and get the deal finalize.
1. This problem is arising due to stamp duty charges on the consideration of the property.
2. Try to negotiate that you are ready to bear 50% of stamp duty charges for access consideration then may be buyer is ready to go for purchase of property.
