Accepting difference in sale vs registration value amount
Querist :
Anonymous
(Querist) 02 January 2025
This query is : Resolved
Dear experts
Any inputs will be helpful
Queries are - I am a seller, selling an old flat (BBMP A Khata, Bangalore, Karnataka) for 55 lakhs, while guidance value is approximately 35 lakhs.
Buyer wants to register at guidance value of 35 lakhs, and pay balance amount of 20 lakhs by any means (cash, account transfer),
As per indexation, property is under loss ,even if sold for 60-62 lakhs.
1. Do I need agreement to sale (signed by buyer/seller), where actual amount of 55 lakhs is mentioned and where it is also mentioned how and when 20 lakhs would be transferred/given by buyer to seller ? or when preparing agreement to sale, it should already contain transaction details on how 20 lakhs was "already transferred" to seller - completed transactions?
Additionally, on how much stamp agreement to sale be prepared then ?
2. Can I directly enter into sale deed without doing agreement to sell - is it necessary from legal or taxation perspective? Do I need agreement to sell to be available as evidence/supporting document for additional income of 20 lakhs to me (though no tax liability as the property is under loss) ? or just producing income details from property sale (35 lakhs sale deed copy, 20 lakhs credit in account statement = 55 lakhs total income on house property)
3. The buyer has to provide amount in sale deed (35 lakhs) by "DD only" before signing the sale deed at SRO ?
Of course, the buyer should, by any means, provide the balance 20 lakhs before signing sale deed, right ?
4. Should the sale deed contain "exactly same clauses" from previous sale deed + additional new transaction that is being done on first page; or buyer can add more clauses in the new sale deed ? In essence, will it be a copy of previous sale deed with just new transaction being added ?
I do not want to accept cash or do any grey transactions
How do I safe guard my interest to take full amount of 55lakhs, safe guard any future issues in property, before singing sale deed and transferring property to buyer ?
Do I need to have a lawyer accompany me to SRO to see through the process and handovers ?
T. Kalaiselvan, Advocate
(Expert) 02 January 2025
The state government sets the guidance value as the lowest price at which a property can be registered. If a property is purchased for less than the guidance value, the buyer will need to pay stamp duty and registration fees based on the amount paid. f a buyer purchases a property for less than the guidance value, the difference between the sale value and the registered value is considered as “Income from Other Sources”. This will be added to the buyer's income and taxed as per the slab that the buyer falls under
You can transfer the property directly by executing the registered sale deed without a sale agreement also. A sale agreement acts as a cushion for the buyer and seller to avoid conflicts of interest. It is important to register the agreement of sale to make it valid evidence in court hence highly recommended.
For all your further questions which are practical in nature you may better consult a local advocate
kavksatyanarayana
(Expert) 02 January 2025
If you go for a sale agreement, compulsory registration is required. You have to mention the actual sale amount of Rs.55 lakhs in the agreement but if the sale amount is noted as 35 lakhs, at the time of registration of the sale deed, the actual amount will be reflected in the registration portal and the buyer has to pay the stamp duty on Rs.55 lakhs.
P. Venu
(Expert) 03 January 2025
Law requires that entire amount to be shown in the sale deed.
An agreement for sale does not make any difference to enter into an agreement for sale if both the parties are in position to sale deed.
To my knowledge, It not mandatory that an agreement for sale unless it has been made mandatory by State Government.
Querist :
Anonymous
(Querist) 03 January 2025
Thanks all, so to summarize:
1. Actual amount be shown in sale deed, generally buyer does not agree to this to save stamp duty
2. If agreement to sale is being done optionally, it should be registered for it to be valid in the court of law
3. Seller should ask for registration at actual value from buyer which serves then for tax purposes also with no hassles with agreement to sale, grey transactions, proving income from sale outside sale deed
T. Kalaiselvan, Advocate
(Expert) 03 January 2025
You have rightly understood various opinions rendered by experts here hence you may take a considered decision based on the circumstances to move on.
