Ltcg on sale of a property

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Chandrika Subramaniyan (Querist)

11 August 2011 I am in the process of selling my flat for 60 L IN Chennai . Sale will be through DD.Buyer wants to proceed with the sale through POA to himself to register the flat in his 3 children’s names for a lower amount of 25 L. I would like to show the full 55 L amount to IT as LTCG…..and invest the calculated LTCG in to NHAI to avoid tax burden. As the title of the property will still be in my name at the time of registration, would IT not question me about the discrepancy in above transaction ? I would be grateful for your guidance so as not to default with the IT and let me know the legal procedure to follow in above case..
Thanking you
Sincerely
Chandrika

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

11 August 2011 Seems possession is handed over on the strength of POA and on receipt of full consideration and registration will be done subsequently according to the convenience of POA. In such situation, though transfer in incomplete, for capital gains purpose such an arrangement will be treated as a transfer and capital gain has to be computed on the date of handing over of the possession.
The 60 lakhs-20lakhs affair is very risky on which I don't want to commend in this open forum.

Chandrika Subramaniyan

Chandrika Subramaniyan (Querist)

11 August 2011 Thank you Mr. Warrior. Grateful if you would consider replying to radnar33@gmail.com...Thanks...Chandrika

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

11 August 2011 Before declaring any sales consideration, care should be taken of about the prescribed circle rates also. If these are
at lower side, to show excessive unsupported sales price may create unwarranted problems. Hope expert will take this point also into consideration.

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