Hi...My mother gifted a property in 2010 to me and my two sisters. We are planning to sell the property now which is worth 2C. The party willing to buy the property is suggesting that they will give 1C as black ( cheques only) and 1C in white( bank transfer) . They want to pay stamp duty for only 1C. Now how can we show the accountability for the 1C received in black ( when we deposit the cheques in bank). Should we show it as capital gains or only the amount for which the buyer paid stamp duty is eligible for capital gains. Please suggest. Will we be answerable if there is discrepancy in the amount deposited in bank and the registration amount for which the stamp duty is paid.
Suggest how we can proceed with selling our house and also paying minimal capital gains tax
You must show entire amount received against sale as sale consideration for capital gain calculation if you are going to deposit cheque.
There could be a problem for buyer as his value wont match with your sale value so first consult with buyer how he would show such 1 crore.
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Thank you.
Sir, so you mean its an issue to the buyer only and should not be an issue for us as there will be discrepancy in the amount deposited in bank and in the stamp duty paid by the buyer.
Technically you must not face any issue as you are showing the total amount as sale and stamp duty payment is not your liability. There can only be one issue regarding stamp duty that why have you signed on a deed with less stamp duty. Rest you can show the amount you received as sale consideration from buyer as his name would be reflecting in your bank account.
Hi
Ideally, the property must be registered at actual sales consideration only.
However, if the buyer doesn't agree, the best you can do is to pay capital gain tax considering 2C as sales consideration i.e. showing the actual sales consideration and not at which the property is registered.
Generally, as stated in the sales deed, the liability of payment of stamp duty is of the buyer.
So, in case of any notice in future, the buyer shall be liable to pay the additional stamp duty.
Hello,
In Capital Gain, the full value of consideration is the amount that is received or accrued to the seller.
Since you have received any amount that is more than the amount mentioned in the sale deed(Stamp Value) your full value of consideration would be Rs. 2 Crores.
So you need to offer Capital Gain on the whole of Rs. 2 Crores as this is the full value of consideration you have received and pay tax on it accordingly.
I hope this answer satisfies your requirement.
Regards,
CA Hunny Badlani
In case of any discrepancy in the future, the buyer would be liable to pay the additional stamp duty as it is the liability of the buyer to pay stamp duty. Therefore it would be advisable to consult the buyer on this issue.
Hi,
Hope you are doing well !!
You need to show the entire value i.e. Rs 2 cr as sales consideration and pay the taxes.
Hi,
- Amount of Rs. 1cr received vide cheque is not black. It is also white as it will be reflected in your bank statement and traceable. For you the total sale consideration considered would be Rs. 2cr for capital gain consideration.
- Showing Rs. 1cr in the sale deed would be against both the parties as buyer would be in more more because of lesser payment of stamp duty by him. In case of discrepancy, AO may consider sale consideration to be Rs. 3cr. Buyer would deduct TDS on only Rs.1cr. Please accept all account payee cheques otherwise it will be treated as cash transaction and penalty of equivalent amount will be levied.
Thanks
In the case of discrepancy, the buyer would be liable for additional stamp duty.