• Sale value more than registration value

I am selling an apartment for 50 lakh. Buyer is taking a loan for 35 lakh. He is registering the home at guideline value for 30 lakh. The bank is paying 30 lakh for the home and 5 lakh for "furnishing" for which I have to sign a work order. The buyer is paying 15 lakh self. All transactions are through demand drafts (no cash involved). What is the tax implication for me as a seller?
Asked 10 months ago in Property Law
Religion: Hindu

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13 Answers

 Capital gains tax will have to be paid by you on the profits you have accrued.


Capital gains tax may either be long term capital gains tax or short term depending upon how long you held the property ie less than 1 year or more.

Rahul Mishra
Advocate, Lucknow
13945 Answers
65 Consultations

5.0 on 5.0

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
89848 Answers
6516 Consultations

5.0 on 5.0

45 lacs will be the sale proceeds in your hands

dont know about the 5 lacs which is being paid to you for furnishing 

so 45 lacs minus cost of acquisition of the flat minus any expenses related to the transfer of flat [like legal fees, brokerage etc.] will be net sale proceeds in your hands on which you will have to pay capital gains tax @20@ with indexation and @10% without indexation 

Yusuf Rampurawala
Advocate, Mumbai. E: adv.yusuf.rampurawala@gmail.com
7074 Answers
79 Consultations

5.0 on 5.0

You may have to pay long term capital gains (if any) for the sale consecrations amount and income tax for the income from other sources for the extra amount of Rs. 15 lakhs.

T Kalaiselvan
Advocate, Vellore
80015 Answers
1674 Consultations

5.0 on 5.0

If you declare actual sale price and pay taxes there is no tax evasion 

Ajay Sethi
Advocate, Mumbai
89848 Answers
6516 Consultations

5.0 on 5.0

If you declare 50 lacs as sale proceeds then your net sale proceeds will be 

50 minus 20 = 30 lacs 

So you have to pay capital gains tax on 30 lacs 

There are options to avoid this tax if you invest the capital gains to purchase another residential house or invest in government specified bonds 

Plz see section 54 and 54ec of income tax act 1961

Yusuf Rampurawala
Advocate, Mumbai. E: adv.yusuf.rampurawala@gmail.com
7074 Answers
79 Consultations

5.0 on 5.0

You can decide about it. 

In any case you may have to pay income tax as applicable for the income you have earned by selling the property. 

It may be long term capital gains tax or tax for the extra income earned beyond sale consideration amount that was reflected in the registered sale deed. 

T Kalaiselvan
Advocate, Vellore
80015 Answers
1674 Consultations

5.0 on 5.0

 

You need to pay long term capital gain for property held for more than 36 months tax is calculated basing on Cost Index Inflation notified. You will be paying tax on 30L. 

Ravi Shinde
Advocate, Hyderabad
3525 Answers
42 Consultations

5.0 on 5.0

Dear Client,

As per the facts which have been provided, if you sell real estate for more than you paid for it, you may owe capital gains tax on the sale of the property. You can report and file this through your usual federal income tax return. If the property is your primary home, you may be able to exclude some of the gain from your taxes.

Thank You.

Anik Miu
Advocate, Bangalore
5846 Answers
59 Consultations

4.9 on 5.0

If the same is declared in IT tax will be liable

Prashant Nayak
Advocate, Mumbai
28570 Answers
101 Consultations

4.4 on 5.0

30 % on capital gain 

Khyati Malik
Advocate, Bhopal
91 Answers
2 Consultations

Not rated

1. Your I.Tax will not be determined involving the guideline price since you are selling the property at higher rate than the guideline price.

 

2. Your I.Tax will be determined based on whether it is long term capital gain or short term capital gain.

Krishna Kishore Ganguly
Advocate, Kolkata
26832 Answers
726 Consultations

5.0 on 5.0

1. It will be on your long term capital gain.

 

2. The amount of gain will be ascertain by calculating the index value of the price.

Krishna Kishore Ganguly
Advocate, Kolkata
26832 Answers
726 Consultations

5.0 on 5.0

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