• Sale value vs Govt approved rate for plot sale

I have a plot in KERALA for sale. 20 cents market value is 30 lakhs. For transfer and registration the value will be around 12 to 15 lakhs. (Government fixed rate) it should not lesser.
For capital gains tax investments, is it mandatory to register with the value 30 L. This would amount an additional RS: 1,35,000/-on stamp duty.
Can transact for 15 L for registration and account 30 lakhs for investments against capital gain
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Asked 6 years ago in Capital Gains Tax

Atleast stamp duty value is taken for capital gain calculation.

Vivek Kumar Arora
CA, Delhi
4825 Answers
1029 Consultations

5.0 on 5.0

Hi

The property must be registered at the actual sales consideration. The stamp duty should not bother you as the buyer will pay the stamp duty (unless agreed otherwise). If you are re-investing the entire 30 lacs to claim capital gain exemption, you should not have any issue at all.

Lakshita Bhandari
CA, Mumbai
5687 Answers
908 Consultations

5.0 on 5.0

Hi,

Hope you are doing well !

The property value should not be less than actual sales value (Market Value) for the registration purpose .

You don't need to bother for stamp duty payment as it is a buyer liability.

If you want to invest the entire amount, there is no issue.

You can invest whole amount of capital gain in long term specified bond as notified by Govt for a minimum period of 3 years u/s 54EC of the income tax act.

Thanks & Regards,

Payal Chhajed

Payal Chhajed
CA, Mumbai
5188 Answers
288 Consultations

5.0 on 5.0

For capital gains, you consider the agreement/registered value, as you cannot have 2 different prices for the same property. If you register for less, remaining amount is always received in cash and becomes unaccounted money which cannot be used for any productive purpose, as it passes through unaccounted channels and never comes in the banking system.

For capital gains calculations, the amount on the sale deed is used for the taxation purposes, Rs 15 lakhs less your inflation adjusted cost will the long term capital gain, and such gain will be invested in Bonds, not the amount you receive in cash, as you really can't disclose that unfortunately. That's the problem with black money. It remains black and unproductive. Just to save some registry amount, such deals happen, even if you can save 100% capital gain legally by investing in bonds and still earn interest every year than hiding the cash. Remember, once you receive cash, it remains cash unless you use it for another property to pay in cash.

Amit Kumar Narula
CA, Bangalore
59 Answers
1 Consultation

5.0 on 5.0

The property must be registered at the actual sales consideration. As the stamp duty will be borne by the buyer you shpuld not have any negative financial impact.

Nikhil Khanna
CA, Mumbai
1429 Answers
19 Consultations

4.8 on 5.0

Hi,

No, You should show the actual transaction value of INR 30 lacs for capital gain irrespective of the lower circle rate prevelant​ in that area.

Abhishek Dugar
CA, Mumbai
3576 Answers
183 Consultations

4.8 on 5.0

Yes ,it is advisable to register property at sale value only i.e.30 lacs.

Can use the full amount for investment purpose..

Hope it helps.

Swati Agrawal
CA, Mumbai
1146 Answers
7 Consultations

5.0 on 5.0

Hi

Under income tax if u sold some property less than the price fixed by government ie. circle rate then you have to pay cap gain tax assuming you sold the property at circle rate.

in your case if MV is 30 Lakh and you want to registered it at 15 lac which is circle rate then you have to treat as you sold your property at 15 Lac only and you can collect only 15 Lac only in white, rest amount to be taken in cash to avoid tax and litigation

Varun Chawla
CA, Ghaziabad
74 Answers
1 Consultation

5.0 on 5.0

No, It is not possible to have two different values.

Registered Value is considered sale value & on that only capital Gain is calculated.

Chirag Maru
CA, Raipur
210 Answers

5.0 on 5.0

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