rohit (www) 23 January 2023

Amount received from opponent in property disputes through court/mediation settlement is taxable?

Hello Respected Sirs/Ma'am,

I have an inherited long legal battle with our tenant over immovable property. Now, it is sent to mediation centre by civil court to find possibility of settlement. I am interested to take money and leave this property through settlement. below are some queries:

My question is that money received through this process will be taxable in any kind ?
what are the modes through which mode i can take money ? Cash is allowed as per law ?
Can I take DD in the name of my wife ? but she is not a registered party in this case

kindly help pls.

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Quick Summary

This discussion explores the tax implications of receiving money from a property dispute settlement through court or mediation. Key questions revolve around whether the received amount is taxable and the legality of various payment methods, including cash and Demand Drafts (DDs) in a spouse's name. Advice suggests that capital gains tax may apply if the settlement involves a property conveyance, and cash payments exceeding certain legal limits are not permitted. The discussion also touches upon the importance of proper documentation, such as a registered sale deed, and warns against illegal offline cash dealings.

4 Replies

Shashi Dhara 23 January 2023

Take money in cash don't mention amount submit joint memo as suit is settled out and to dismiss petition.

Advocate Rajamahendra Varma P (Advocate) 16 November 2023

Generally, capital gain will attract as sale of immovable property. If you settle the matter offline with cash dealings, which is illegal and not recommendable. In case any rides, you have to face legal consiquences for the black money.

T. Kalaiselvan, Advocate (Advocate) 17 November 2023

You may have to execute a registered sale deed after receiving the sale consideration amount.

By that you may have to pay the long term capitals gains tax.

You cannot accept cash for more than Rs. 20000 hence you better oibtain a DD for the entire amount

1 Like

P. Venu (Advocate) 17 November 2023

The facts posted are incomplete, disjointed and lack clarity. If the other party is the tenant, How there could be a settlement involving conveyance of property?