Property transaction in cash
sandeep
(Querist) 28 October 2011
This query is : Resolved
Is it possible/ acceptable to receive part of the sale deed amount(say upto Rs.one lac) in cash if it is properly mentioned in the sale deed document?
With best Regards
Guest
(Expert) 28 October 2011
Cash Transaction for Rs. fifty thousands or more are prohibited.
ajay sethi
(Expert) 28 October 2011
insist on full cheque payment .
sanjeev murthy desai
(Expert) 28 October 2011
In such circumstances as you mentioned in the Sale Deed, then you can receive by way of cash. You have the income proof as a Sale Deed.
Raj Kumar Makkad
(Expert) 28 October 2011
There is no legal hurdle to accept declared amount in cash as mentioned in the given matter.
mahendrakumar
(Expert) 29 October 2011
when any transaction more than rs50,000 is to be done either b y a cheque or dd,how could such transaction be legally valid?
Shailesh Kr. Shah
(Expert) 29 October 2011
you can received any amount even in crore. There is no legal bar to accept cash on sale of property except its not a part of seller/purchaser's business i.e. they are not engage in the business of sale purchase of property.
Moreover, if they engage in the business of sale purchase property and accept cash, no effect in legality of sale deed. However, it act dissallow such transaction.
Raj Kumar Makkad
(Expert) 29 October 2011
There is no crime to transact in cash for the amount of more than Rs. 50,000/- if it is white money.
Shailesh Kr. Shah
(Expert) 29 October 2011
I would like to draw kind attention of all experts that there is no law relating to rs.50000/= in such cases.
If, there is such provision related to this, please provide me. I Shall be grateful to you.
Guest
(Expert) 29 October 2011
The limit of cash transaction is 20,000 and not 50,000, as mentioned earlier in my post, the error in posting is regretted.
However, it may be clarified that as per the provisions of Sec.40A(3) of the Income Tax Act, the payment in a single day should not be exceeding20000. It doesn’t mean the single payment shouldn’t 20000 but the aggregate amount should not exceed the limit. Some parties split high value payment into several cash payment for evasion of section 40A (3) a, so this rule is for evasion of payments.
As per the EXPLANATORY NOTES to the provisions of the Finance Act, 2008, "Sub-section (3) of section 40A is an anti tax-evasion measure. By requiring payments to be made by an account payee instrument, it is possible to verify the genuineness of the transaction. Thereby the risk of evasion is substantially mitigated. Field formations have reported that assessees tend to circumvent the provisions of sub-section (3) of section 40A by splitting a particular high value payment to one person into several cash payments, each below20,000/-. This splitting is also resorted to for payments made in the course of a single day. The courts have approved such splitting by interpreting the words ‘in a sum’ used in the section to mean a single sum thereby applying the limit to each transaction. This interpretation is against the legislative intent and has, consequently, adversely affected the efficacy of this antiabuse provision."
However, in some selected cases, as in the following cases, exemption has been provided under Income Tax Rule 6DD where payment in a sum exceeding twenty thousand rupees may be made otherwise than by a crossed cheque drawn on a bank or by a crossed bank draft.
where the payment is made to—
(i) the Reserve Bank of India or any banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949);
(ii) the State Bank of India or any subsidiary bank as defined in section 2 of the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959);
(iii) any co-operative bank or land mortgage bank;
(iv) any primary agricultural credit society as defined in clause (cii) of section 2 of the Reserve Bank of India Act, 1934 (2 of 1934), or any primary credit society as defined in clause (civ) of that section;
(v) the Life Insurance Corporation of India established under section 3 of the Life Insurance Corporation Act, 1956 (31 of 1956);
(vi) the Industrial Finance Corporation of India established under section 3 of the Industrial Finance Corporation Act, 1948 (15 of 1948);
(vii) the Industrial Credit and Investment Corporation of India Ltd.;
(viii) the Industrial Development Bank of India established under section 3 of the Industrial Development Bank of India Act, 1964 (18 of 1964);
(ix) the Unit Trust of India established under section 3 of the Unit Trust of India Act, 1963 (52 of 1963);
(x) the Madras Industrial Investment Corporation Ltd., Madras;
(xi) the Andhra Pradesh Industrial Development Corporation Ltd., Hyderabad;
(xii) the Kerala State Industrial Development Corporation Ltd., Trivandrum;
(xiii) the State Industrial and Investment Corporation of Maharashtra Ltd., Bombay;
(xiv) the Punjab State Industrial Development Corporation Ltd., Chandigarh;
(xv) the National Industrial Development Corporation Ltd., New Delhi;
(xvi) the Mysore State Industrial Investment and Development Corporation Ltd., Bangalore;
(xvii) the Haryana State Industrial Development Corporation Ltd., Chandigarh;
(xviii) any State Financial Corporation established under section 3 of the State Financial Corporations Act, 1951 (63 of 1951);
Hope the above clarification would satisfy the query of Mr. Shailesh Kr. Shah also.
Surendra Singh Chandrawat
(Expert) 29 October 2011
It is immaterial whether the payment is in cash or cheque, major is to have legal money but not hawala or something.
prabhakar singh
(Expert) 29 October 2011
No body can disagree with fact that IT Act does lay down what Dhingra ji says.
But it is the headache of party paying and not the party receiving ;more over payment under a registered sale deed can be recognized as to have taken place because of the endorsement of the registrar is made on the deed which in law is presumed to be correct.
Shailesh Kr. Shah
(Expert) 29 October 2011
Shri PS Dhingra,
Respected Sir,
Thanks for Reply.
I already aware this provision of the IT Act. you can confirm it from last line my first answer of this thread.
When I saw, after your reply that Shri Mahendra kumar and Shri Raj Kumar Makkad also talking about 50000/= then i asked to know that about any 'such law'?
Thanks
with Regards,
Guest
(Expert) 29 October 2011
Dear Shailesh,
The amount shown was an unintentional error on my part on account of wrong key punch in haste on the numeric key pad of the keyboard, as the figure 5 was just above the key of 2.
