Dear Sir/ Madam, I am planning to buy a house and the house is currently registered in the name of a wife and Husband. Both of them live in US but the husband is in India currently. As per my conversation, husband came to India around August 2020 and planning to go to US in Feb 2021. Wife is still in US. Since wife is still in US, she will be considered as NRI and I have to deduct 20 percent tax while sending the transaction amount for property registration . Husband will be staying in India for more than 182 days and can be considered as resident. We signed sale agreement for entire sale price that we agreed for buying the property. But in sale deed, we will show the amount as per the guideline value (Circle Rate) for the area which will be less than the actual agreed sale price. The difference between sale deed amount and sale agreement amount ( Actual Sale Price) is around 20L. I am planning to send this money to Husband's Bank account through bank transfer. Below are my questions. 1. If am sending the difference amount between sale deed and sale agreement through bank transfer, will there be any problem for me in Future? 2. Will there be any problem if I am not showing the entire agreed transaction value in sale deed. Please note that , the value that I am showing in sale deed is as per the guideline value. It is not less than the guideline value. 3.While deducting the TDS, should I deduct Tax on the amount shown in Sale deed or the amount shown in sale agreement. 4. While deducting the TDS, should I deduct tax on the total amount or half of the total amount since Husband is considered as Resident. 4. Should I get proof or declaration from Husband showing that he was in resident status for the Tax year ( [deleted])
Sir,
Sale price will be higher of circle rate and agreement value. So in future, there can be litigation as why you have transferred money above circle rate. It can be case of tax evasion.
2. it is not advisable.
3. TDS rules for both are different and needs to be followed as per their residential status.
4. yes if possible
Hi Vidya, Please note that sale agreement price will be equal to sale price but the amount shown in sale deed will be less than actual sale price but not less than circle rate . Is this okay? Should i deduct tax on sale agreement value or sale deed transaction value
Dear Sir,
Hope you are doing well !!
The property must be registered at stamp duty or actual sales consideration, whichever is higher.
Also, capital gain will be charged on sale consideration or stamp duty value whichever is higher.
1. Yes, it would create problem at the time of scrutiny.
2.Yes, the buyer (you) will have to pay stamp duty on the difference between the market rate (actual rate) and the circle rate at the time scrutiny If this case is caught up.
Next consideration is cost of acquisition when you will be selling the property. You shall only be eligible to claim the costs that have been mentioned in the sale deed registered Thereby the capital gains would be more and more taxes shall have to be paid.
3.You need to deduct tds on actual sales consideration.
4.As per ownership of property.
You are required to file two Form 26QB and pay the TDS according to the share of each joint owner in the property. - You are also required to file 26QB at the time of payment of each installment.
5.Yes, you should take the proof for the same.
It is advisable to take a phone consultation for detailed discussion.
1. Yes
2. Sale consideration should not be less than circle rate.
3. Sale deed
4. Deduct TDS in the hands of beneficial owner of the property.
5. Yes
Please take phone consultation for detailed discussion.
No, these should be consistent to avoide future litigation. TDS will be on sale price.
Feel free to contact in case you require further clarification
Queries 1 & 2
It is not advisable to have differences in sale consideration between agreement for sale and the actual sale deed, as it can have serious issues of non compliance with the regulatory provisions under Income Tax Act, RBI Guidelines and even perhaps FEMA.
When you pay the vendor more than the money shown in the sale deed, what justification you will be giving to make such payment - payments towards purchases or services or gift or loan transaction? If its towards purchases or services, there may be issues under GST. If its gift, then such gift is taxable in the hands of the recipient, as you are not related to him. If its a loan transaction, how do you close the transaction later? Hence, please don't have any major variation between the agreement for sale and sale deed in respect of sale consideration.
3 )You should deduct tax at source on the sale consideration as per sale deed.
4) Its always advisable to take declarations about the residential status when you deal with NRIs.
Tax rate for wife will not be straight away 20% cess and surcharge might apply.
How has husband become resident?
Government themselves cannot get sale agreement but if in some scrutiny or something if they get sale agreement that might create problem and if you are paying entire amount in cheque why do you wish to register the same at lower value.
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Thank you.
Hi
1. Yes it may have problem in future.
2. Yes you should show entire amount of sale deed.
3. TDS should be deducted on sale deed value.
4. Yes
Hi
As per my understanding you should deduct tds on actual sale price.