Can Right to title be sold?
Querist :
Anonymous
(Querist) 16 March 2011
This query is : Resolved
I would request the learned experts to kindly opine on the following.
I had entered in to an agreement with a builder at Gurgaon to buy a flat. I have the allotment letter , agreement for sale with the builder & demand for installment payments issued by the builder. I have paid the entire consideration before 3 years but could not register the sale deed since I was away. Now I want to sale the flat with out registering the sale deed in my name. My quiries are:
1) Can I sign the sale deed as the vendor or I shall have to sign as the confirming party whereas the builder will sign as then vendor.
2) Will the registering authority accept me as the vendor of the flat with out myself having any registered sale deed in my name?
3) Is there less stamp duty required for registering sale deed with co-operatives at Noida? What is the percent?
4) In what way can I sale the said flat with out first registering the sale deed in my name?
5) After selling the flat can I claim the profit as LT Capital Gain & save tax by buying dwelling house and/or investing in infrastructural bonds? Some said no I can not claim LTCG since I do not have the title of the flat & it is simple business gain. Some said yes I can claim as I have the right to title of the flat which I can pass/sell.
6) What is right to title? Under what section a person having right to title but not title can claim a profit/ gain as LT Capital Gain after selling the said right to title?
R.Ramachandran
(Expert) 17 March 2011
Dear Anonymous,
(1) & (2) When you do not want the sale deed to be in your name, you cannot be the owner of the flat and therefore the question of your selling the flat to any one in your capacity as owner of the flat does not at all arise.
(3) There is no concession in stamp duty whether it is from Co-op. society or builder etc.
(4) In case your first agreement to purchase with the Society contains a clause that the sale deed would be registered in the name of the buyer or any of his nominees, in that case, the flat can be directly registered by the society in the name of the person whom you nominate.
(5) If you adopt the method in (4) above, you would not be considered as selling any flat. Rather you would be paying the consideration for the flat and getting it registered in favour of someone. It would be a gift to that some one (and if they do not happen to be your close relative say father, mother, sister, brother etc.) then it would get taxed in their hand. (THIS IS MAINLY BECAUSE, THE SALE CONSIDERATION IF ANY PAID BY THE SAID PERSON TO YOU DO NOT GET RECORDED ANYWHERE - SINCE NO SALE TRANSACTION TAKES PLACE BETWEEN YOU AND THE BUYER!). Since there is no sale of the property by you, the question of long term capital gain would not arise.
HOWEVER, if you get any money from the prospective buyer in whose name, using the nominee clause, you register the building directly by the Society, the said money would be treated as your income and would be taxed in the normal way (not as L.G.Capital Gain) applying applicable slab rates of tax.
