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Sagar R Trivedi   04 March 2021

paid registration fee can get back ?

Registration fee paid for rent agreement in surat..now both party dont want to do agreement...& Registration fees 12k has been paid...can we get refund of registration fee if registration not done??


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 1 Replies

Ishaan   22 March 2021

As you stated that both parties backed out of the agreement and no registration has been done yet, yes you can get the fee refunded. 

Treatment of token money accepted before the finalizing of a deal comes under the income tax laws. Once terms and conditions regarding the property are decided upon, some cash is sometimes exchanged as a sign of good faith between the parties involved. The amount paid varies according to the size and location of the property and also as per the terms and conditions laid out by the seller. If the seller backs out from the deal, the buyer may file for a  compensatory suit and demand that they get refunded the money they lost in the transaction.

If the buyer backs out, the seller may forfeit the token money paid beforehand and in some cases decides against doing so. The buyer does not have the right to any tax benefit for the amount paid, as it comes under the capital loss bracket under tax laws. However, if the money is forfeited, it becomes the seller’s income for that fiscal year and is hence taxable. Such money comes under the bracket of income from other sources and is not taxed as capital gains though the money comes from a capital source such as property asset. Before 2014, wherein an amendment was made to the tax laws involving the deduction of money, the amount forfeited was deducted from the acquisition cost.


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