stamp duty

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john (Querist)
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25 November 2009 if 500sq ft. residential flat which is under construction, costing Rs. 60,00,000/- actual. municipal value Rs.60,00,000/- is purchase in the following manner
builder asks to pay Rs.30,00,000/- through cheque, the agrement will be made of RS. 30,00,000, and to pay stamduty on Rs. 60,00,00 municipal value. remaining amount of Rs. 30,00,000 cash.
would the transaction attract or create any problem in the future relating to income tax or any other officials. (if the agrement is duly stamped and authorized by the builder funishing with all legalities.)
plz solve.

chetan soni

chetan soni (Expert)
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25 November 2009 Its not a good deal. That means you will pay him 50% in black. Which will directly go in this pocket without paying any taxes on that.

The cost of property in your hands will be only 30L. Also at the time of sale of this property there will be big amount of capital gains in your hands & you will need to pay the capital gain taxes.

Sunil

Sunil (Expert)
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25 November 2009 Effective 1/10/2009 you will also have to pay Income Tax on Income from other sources if the difference between stamp duty valuation and purchase price is more than Rs.50,000. Therefore your cost of purchase will increase by the tax on the difference and moreover you will not be able to claim it as a purchase cost while selling the property.