No it can't be like that. Both the documents should have same amount.
Registration value vs sale consideration in sale deed
I am buying an unregistered resale property from a seller by getting into the tripartite assignment agreement stating the transfer of ownership from the seller to buyer (me). Builder will also sign the agreement accepting the transfer of ownership in their records. Assignment agreement shows the exact payment details (95 lakhs) but the builder has included only 53 lakhs(amount that seller paid to builder) in the sale deed. There is no mention of 95 lakhs that I will pay to the seller. Builder is saying that property will be registered at 95 lakhs so there is no risk of paying taxes on capital gains. Can registration value of the property be different than the sale consideration value mentioned in the sale deed in this tripartite scenario ? If yes, then in future if I sell the property, which value is used to calculate the capital gain? The one in the sale deed or one at which the property is registered at?
Asked 3 years ago in Property Law
Religion: Sikh
6 Answers
Since builder has received only Rs 53 lakhs he would mention said amount only in sale deed
2) deed of assignment mentions actual consideration paid by you
3) instead of buying un registered resale property better option is to buy flat on resale basis where sale deed is registered
4) your capital gains would be as per deed of assignment
For the purpose of calculation of long term capital gains, the date of purchase on the basis of the registration and the sale consideration written on the registered document would be taken into consideration.
- Long Term Capital Gain is calculated by deducting the sum of the following costs from the final sale price of the house:
- Indexed Acquisition Cost
- Indexed House Improvement Cost
- Transfer Cost
Long term capital gains can be determined by calculating the difference between the sale price of the house and the indexed acquisition cost of the house.
Dear sir,
The Registered value is the ceiling price below which the property should not be registered. The property can be sold at a higher rate also. Rate of registration is stipulated but the sale value can be higher.
Thank You
1. this triparty agreement will surely have some problem regarding the stamp duty payment
2. two transactions are being merged in one single document
3. this amounts to evasion of stamp duty
4. on the first transaction between the builder and your seller, stamp duty was required to be paid on the then market value of the property or the agreement value [Rs. 53 lacs] whichever was higher
5. on the second transaction between the seller and you, stamp duty is required to be paid on the market value of the property or the agreement value [Rs. 95 lacs] whichever is higher
6. i would not at all advise if the agreement value in the triparty agreement is stated as 53 lacs
7. in the future when you go to sell this property, you can deduct only Rs. 53 lacs and not the full 95 lacs from the sale price of the property. So your capital gains will be more and consequently the capital gains tax outgo would also be more
8. i think in the triparty agreement the builder is being joined as a confirming party and not as the vendor/seller
9. he is deliberately stating 53 lacs so that the builder's capital gains would be computed by considering 53 lacs only and not 95 lacs [as the title still rests with the builder and your seller does not have any title to the property as his agreement is not registered]
10. as per the relevant provision in the income tax act, if the agreement value is stated to be less than the market value, then for the purpose of computing the capital gains, the market value is considered and not the agreement value. Also the difference in the two values is taxed in the hands of both the seller and the buyer. For the seller, the difference is taken as gift from the buyer and since the parties would not be related, that amount is included in the income of the seller and taxed according to the tax slab in which he falls. For you, that is the buyer, the difference is added to the agreement value and the capital gains at the time of sale would be computed by deducting the agreement value plus difference amount from your sale price.
11. this really sounds like a dubious transaction to benefit the builder
12. i would suggest that a proper sale agreement be registered between the seller and builder and proper duty with penalty be paid on that document and thereafter the seller can enter into an agreement/sale deed with you, without including the builder as a party
13. in this case it is not that the builder is not available. He is very much there. It is just that the builder and seller are trying to avoid their liabilities of paying the proper duty and registration fee in respect of the initial sale transaction. You are being made a scapegoat to avoid their liabilities.
1. Property is not registered. In the instant case, the deed conveying the title of the property against payment of consideration will be registered.
2. When your sale deed will show payment of Rs.53 lakhs as consideration paid by you to buy the said property, how will it be shown that you have paid Rs.95 lakhs?
3. So, the stamp duty will be charged on Rs.95 lakhs being the circle rate of then property and I.Tax department will consider Rs.42 lakhs (Rs.95 lakhs - Rs.53 lakhs) as your gain/income which will be taxed.
