Satish 24 December 2015

Amenities agreement

Hi,

I am in the process of buying under construction flat from investor who buy this flat from Developer/Builder for 45Lacs (Agreement Cost) in Jan-15 (stamp duty also paid by him)

Now investor is selling his flat for 70 Lacs (Agreement Cost) to me, which mean investor is liable for paying tax on capital gain of Rs 25Lacs (as he is selling within 2 yrs)

Here for saving his Tax, he is planning to make an Amenities agreement (between Investor and Developer/Builder) for 15 Lacs, and also adding below clause in my agreement.

"The Transferors also confirm that they will pay the balance due of the amenities agreement dated Jan-15 executed between Transferors and the Developers and that the Transferees shall indminified by the Transferors against such payment to be made by the Transferors to the devlopers"

Below are my doubt:-

1. Is this Amenities Agreement is going to reduce my Flat cost to 55 Lacs (71-15)

2. If i sell this flat in next year for 71 Lacs, than what is my Capital Gain : 1Lacs (i.e. 71-70) or 16 Lacs ( i.e. 71 - 55 )

3. Is this safe for me.

I Already visited TAX consultants who told me that there is no impact on my Flat Cost, but i still need Experts advise, Pls Help

Regards

Satish

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2 Replies

Satish 25 December 2015

Hi,

Request to Expert pls advice, as today i contacted one Tax consultant said that if i sell that Flat at 70lacs than my capital gain would be 16 Lacs

T. Kalaiselvan, Advocate (Advocate) 03 January 2016

If the purchase is by registered sale deed which includes the amenities agreement in the total cost and the cost is shown as 70 Lakhs, then the capital gains would be as what you said i.e., Rs. 1 Lakh only but if that was not included in the deed, then the capital gains would 16 Lakhs.