Tax liability to purchase agri. land from adivasi
Ramesh Baliram Lute
(Querist) 01 December 2025
This query is : Resolved
My friend having Salary Income being Adivasi (Buyer) has gone through Registered Agreement for Purchasing Agriculture Land (Part) from Adivasi 4 joint Holder (Seller) for Agriculture Purpose only.
The Registered Agreement Sale Value is made for Rs. 29 Lakh. But as per Ready Reckoner Value of this Land is workout to be Rs. 70 Lakh, and it is Mandatory as per Govt of Maharashtra Adivasi Rule to Pay Full amount of Rs.70 lakhs to Sellers Bank a/cs, only then Sale Deed will be Executed. The mandatary NOC from Distt. Collector for Purchasing Agriculture land from Adivasi to Adivasi (Both Seller and Buyer Adivasi) has been obtained.
Buyer has arranged Rs. 29 Lakh as own Contribution (Including Personal Loan etc,) and Additional amount of Rs. 41 lakhs will be arranged from Friends and Relatives, by way of Cheques.
My query is what is the Legal way, the Buyer will get Refund of Excess amount of Rs. 41 lakhs from Sellers by way of Cheques/ Cash in his favor or Friends and Relatives so that their Contribution can be refunded.
What are Tax Implications on Buyers Side in 26AS SFT information, is there any Capital Gain/Exemption of Agriculture Income, and how to show these Financial Transaction in his Income Tax Return FY-2025-26. Also is there any Income tax implication on Friends/Relatives to issue cheques in Buyers Name and get Refund (Received Cheques) from Sellers. What is the Tax implication of Excess Amount of Sale Deed Value on the part of Sellers side, who are Poor Adivasi Farmers having Pan Card.
T. Kalaiselvan, Advocate
(Expert) 01 December 2025
The ready-reckoner value is ₹70 lakh, and government rules require paying ₹70 lakh to sellers, then any “refund” of ₹41 lakh from seller back to buyer or buyer’s friends will be treated as:
Unaccounted / bogus transaction,
Could be considered “accommodation entry”,
Buyer may be taxed under Section 68 (unexplained credit),
Seller may be taxed under Section 69A / 69C,
IT Department can treat the refund as black-money circulation.
Therefore: No refund from seller to buyer/friends is legally allowed.
The only legal option is to structure the entire funding properly BEFORE payment.
Ramesh Baliram Lute
(Querist) 02 December 2025
Thanks for advise. Can we make in written Sale agreement that Buyer should arrange excess amount by way of loan from Friends/ relatives without interest with specific loan repayment. In your opinion what are the Legal options to structure Funding properly as per Income Tax perspective from both side Buyer as well as Seller side. We are ready to pay Fees if any .
T. Kalaiselvan, Advocate
(Expert) 02 December 2025
Basically this is a outright purchase of agriculture landed property for the rates as per the government guideline value.
If you both have an understanding then you may ask him to pay that amount ars return of loan but you must show that in your income tax returns not only while receiving it but also should have reflected the amount while lending.
Actually what do you want to clarify by the subsequent post?
How can you say that this is an excess amount, i.e., the difference between the amount of purchase and the ready reckoner value?
Ramesh Baliram Lute
(Querist) 03 December 2025
Buyer had already made Registered agreement with the Sellers(4Person) to Buy Agri. land for Rs. 29 lakhs for Agri. Purpose Only. He has made Rs 29 Lakh as Own Contribution. When he obtains NOC from Distt Collector, its clearly mention that Buyer Should Pay Rs. 70 lakhs as per Ready Reckoner Value to Sellers Banks a/cs. Buyer is not aware of this huge amount of Diff between Agreement Sale value and Ready Reckoner Value. Buyer now arranges this difference amount by showing interest free loan from relatives/friends by preparing loan agreement. Sellers are ready to pay Buyer this difference value by postdated cheque after Sale Deed executed. We want to know the Legal way of Loan agreement Documentation and Return of Sale value Diff. within the Sale Deed or to make two Separate Agreement one for loan from friends/relatives and second from Seller to Return Diff amount to Buyers, in purview of 26as SFT information, any compliance from IT Authority for Both Parties as well as Friends/Relatives. i.e. what type of Legal Funding Structure we can make. Are this Sale/Purchase transaction of Agri. Land (Both Party are Adivasi)are exempted from Income Tax. Is there any official Helpline /forum of Income Tax Dept. to clarify this issue.
Ramesh Baliram Lute
(Querist) 05 December 2025
Please advise further legal solution of the queries.
P. Venu
(Expert) 27 December 2025
To my knowledge, Ready Reckoner value is not absolute. Competent authority can relax if the sale value really a lesser amount.
Why Collector's permission for sale?
