Sale value exceeds 4 times of the guideline value
Saravanan
(Querist) 07 December 2014
This query is : Resolved
I have a Residential house and i am planning to sell it for almost 1 Crore .
But its govt guideline value is only 26 lakhs .
I have approached the Reg dept and asked whether it is applicable to register the property for 1 crore.He told even though its a govt rule to register for the actual sale value,he wont allow me to register for one crore,since it will increase the guideline value for that area.
This is a problem for him since he is going to answer this in the future audits/enquiry .(all Deviations in the registrations will need to be answered in the future audits).
That is a problem for others who are coming for the registration in that area.
Also if i stick on my point ,i may get problem from the local peoples of that area regarding the same .(cos i will increase the guideline value).
All these points are all told by him in offline.
These are the problems i am facing .
I have a Residential house and i am planning to sell it for almost 1 Crore .
But its govt guideline value is only 26 lakhs .
I have approached the Reg dept and asked whether it is applicable to register the property for 1 crore.He told even though its a govt rule to register for the actual sale value,he wont allow me to register for one crore,since it will increase the guideline value for that area.
This is a problem for him since he is going to answer this in the future audits/enquiry .(all Deviations in the registrations will need to be answered in the future audits).
That is a problem for others who are coming for the registration in that area.
Also if i stick on my point ,i may get problem from the local peoples of that area regarding the same .(cos i will increase the guideline value).
All these points are all told by him in offline.
These are the problems i am facing .
But still i want to be a good indian Citizen .
I want to pay the income tax whichever it is 20 % or 30 % .
Now my question arises .
1) I want to be clean .How to make a clean Transaction?
2) if i get two cheque's for 25 lakhs and 75 lakhs and paying Capital gain tax (20 %) for 25 lakhs and normal income tax 30 % for that 75 lakhs ..is that ok??
3) Do Govt will ask question abt that 75 lakhs ??
4) or it will create any problem for me or to the buyer??
I dont want put buyer in problem too..
I wanna to be clean always.Please suggest me a way to sell my property.
Guest
(Expert) 07 December 2014
Guide Line Value is the Govt Value.Now you have an Offer for 4 times the Guide Line Value whereas could you ensure all others would be able to get same Price.So Just Proceed as per Guide Lines Instead of Proving yourself Too Honest.
Saravanan
(Querist) 07 December 2014
Thanks Mr Rajkumar for your immd reply.
Its not only the matter of honest and also i dont want to get unneccesary problems in future too..
If i get 75 lakhs in cash and if i get caught by IT dept or some other!!!its a problem for me!!!
So please suggest me a way to sell my property.
Shailesh Kr. Shah
(Expert) 07 December 2014
So, it would be better to sale on actual price for peace of mind also.
Saravanan
(Querist) 07 December 2014
ya..but the reg dept is not aggreing to do that.For that only i have mentioned the issues which i am facing !!!
Anirudh
(Expert) 07 December 2014
Dear Mr. Saravanan,
So long as you are able to sell your property for Rs. 1 crore and you are able to get the money by means of cheque (i.e. in white)all that you have to do is, just prepare the Sale Deed, pay the Applicable stamp duty on Rs. 1 crore and submit it to the Sub-Registrar's office and take receipt.
Let the Sub-Registrar refuse in WRITING to register it.
By taking the matter to Court, you can have the registration done. BUT YOU HAVE TO GO THAT ROUTE. (Whether anybody else gets affected or not is not your or Registrar's concern.)
If you had held the property for more than 3 years, then you are liable to pay 20% tax as Long Term Capital Gains tax.
In case you want to save on capital gains tax, there are methods provided in the Income Tax Act itself. (That you can consider later, in case you want to save).
But you cannot escape income tax by taking different cheques. If you do so, there is every chance that on the amount of the cheque which you take, which represents the difference between actual sale consideration and the guidance value, you will be liable to 30% tax instead of 20% which is applicable to Long Term Capital Gain.
Therefore, act straight. Do not succumb to any pressure from any quarter including the sub-registrar. In the process, even if you have to approach the HC because of refusal to register by Sub-Registrar, better do that. As rightly told by Mr. Shailesh Kr. Shah, you will have peace of mind at the end of the day, for having done a very correct and right thing.
ajay sethi
(Expert) 07 December 2014
agree with MR Anirudh
Saravanan
(Querist) 07 December 2014
ok...Thanks Mr Anirudh..
Now i have a buyer who is ready to pay full value in white ...but he doesnt want to force the resistrar to do the full value .
Instead , he is suggesting me ..he will give 2 cheques one is for 25 lakhs for the sale deed value as per the guideline value and another cheque is for 75 lakhs and that is the reamining amount.
This 75 lakhs is not a black money ,rather he already paid tax for that amt too.
He also added ,i can pay Income tax as 30 % for 75 lakhs and 20 % (Capital gain) for 25 lakhs .
Now my question arises...
If i register for 25 lakhs and ready to pay the income tax for the remaining 75 lakhs as 30 % tax,whether income tax dept will raise a question like
1) the sale deed is oly for 25 lakhs but how u got this 75 lakhs???
2) whether this 75 lakhs will be problem for me if i receive it in cheque??
3) If i do like this am i violated any law???what will be the consuequences??
Thanks a lot Sir..
Shailesh Kr. Shah
(Expert) 07 December 2014
Dont accept 75 lacs,which is not shown on sale deed.
Anirudh
(Expert) 07 December 2014
Dear Mr. Saravanan,
You will not have any problem, so long as you pay the income tax on the Rs. 75 lakhs you receive from him.
However, since you will be paying Rs. 7.5 lakhs more tax (i.e. the difference between 75lakhs x 30% and 75 lakhs x 20%) + Surcharge + Educational cess etc., ask him whether he is ready to bear the extra amount of tax which will be nearly 8 lakhs also and therefore give you 83 lakhs instead of 75 lakhs?
If he gives, then you have to pay on 83lakhs 30% which will be Rs. 24.9 lakhs tax plus surcharge and education cess etc. which will be nominal.
If he agrees, you will be losing only about maximum 2.5 (instead of 7.5 lakhs).
Further, he should not mind paying you, because he is saving quite a huge amount by way of less stamp duty on 75 lakhs.
Now, that you know, how to go about, you take a call yourself.
Rajendra K Goyal
(Expert) 07 December 2014
Agree with the advise of expert Anirudh.
V R SHROFF
(Expert) 07 December 2014
You have rigt to sell at whatever best price available to you, and can register the same.
Registrar cannot refuse to register your agr.
He will charge higher Stamp Duty + Regn.
It is u to decide , to listen to your locality resident/ registrar or not..
You can do any one of your choice..
T. Kalaiselvan, Advocate
(Expert) 10 December 2014
Well advised by experts, specially by expert Mr. Anirudh and expert Mr. Shroff, I go with their views. If you find the buyer is tricky, you may drop him and look for another who will be out straight there.
Saravanan
(Querist) 11 December 2014
i again contacted the reg dept with the decision of regsitering to the actual sale value.
But the officer clearly told...no registration happed in the past for this much of value in that area.so he cant allow me to do the registration.
when i asked this statement in letter,they told they wont give it...thats all ..you can go...
i am really frustated ....
a common man cant even sell his property by following the govt law???
Guest
(Expert) 11 December 2014
Mr. Saravanan,
Mr. Anirudh has rightly advised. Must follow his advice.
For your information, gguidelines value is the lowest permissible value from which registration should not fall below that. Market value is of prime consideration for registration purposes, provided that does not fall below the guidelines value. The registrar should have known that fact. The guidelines value is provided to the registrars only to check that any down valued sale should not become the cause of loss of revenue to the state.
So, there should be no hitch for you to follow the advice of Shri Anirudh. Let the registrar give his objection in writing.
Guest
(Expert) 11 December 2014
Mr. Saravanan,
Past cannot be quoted as precedent in registration of property deals. Moreover market value varies from place to place. If the registrar prefers to quote the past as precedent, most of the old properties would have been registered with even less than Re.1 per square yard or meter. Ask him, would he like to follow those precedents?
You should not get frustrated. You may approach to the District collector with application to direct the registrar to register your sale with the market value of Rs. one crore.
