suggestion on a deal

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john (Querist)
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03 February 2010 inorder to help me a freind broker ask me to pay him 10.5lakhs today which he will use in his business and he will offer me a 1bhk flat after 3 years. the 1bhk flat is under construction whose value today is Rs.21lakhs
will i get attracted by tax when the flat will be transferedin my name or what wud be the safest suggestion to go ahead.

CA. Amit Daga

CA. Amit Daga (Expert)
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03 February 2010 You will not get any tax liability. Because you are not selling the house . So there is no question of Capital Gain. But one thing please take all proper documents of the flat in your name and discuss about registration charge now itself.
Amit

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john

john (Querist)
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03 February 2010 but sir
i am paying him Rs.10.5lakhs for the flat which is of value Rs.21lakhs. the difference of Rs.10.5lakhs wont create any problem.

will it do if i make an agreement that Mr.x(broker) will offer me a 1bkh flat in so&so Bldg after 3yrs for a payment of Rs.10.5lakhs made today 3/feb/2010. on a stamp paper.
plz suggest

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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26 July 2025 Got it! Here’s a clear take on your deal and tax implications:

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### Situation Recap:

* You pay Rs. 10.5 lakhs now to your broker.
* Broker promises to give you a 1BHK flat after 3 years.
* Current market value of flat = Rs. 21 lakhs.
* You pay half the flat’s current value upfront, rest after 3 years (implied).

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### Tax Implications & Legal Risks:

1. **Tax on Transfer of Flat**

* When the flat is transferred to you, **stamp duty and registration charges** will be applicable on the **market value** or the **agreement value**, whichever is higher.
* If you buy the flat for Rs. 10.5 lakhs but its market value is Rs. 21 lakhs, authorities may treat Rs. 21 lakhs as sale consideration.
* This means you could be liable to pay **capital gains tax** on the difference (if the seller is an individual/company) and stamp duty on Rs. 21 lakhs.

2. **Gift Tax / Income Tax on Difference**

* The Rs. 10.5 lakh difference may be considered a **gift** or **deemed income** for the broker if no proper consideration is paid.
* You might face scrutiny under Income Tax for undervaluation.

3. **Agreement on Stamp Paper**

* Yes, a legal agreement is essential.
* It should clearly state terms, payment schedule, possession, penalties, etc.
* Stamp duty on this agreement should be paid as per the state law to make it enforceable.

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### Safest Suggestions:

* **Agree on the full sale price upfront (Rs. 21 lakhs or close to it)**, even if payment is staggered.
* Ensure the **agreement of sale** mentions the full market value to avoid trouble later.
* Keep all payment receipts, bank transfers for proof.
* On transfer, get the property registered at the **full market price**.
* Consult a lawyer to draft the agreement and a CA for tax planning.
* Beware of the risk if the broker uses your money elsewhere or the project gets delayed or cancelled — consider escrow or other safeguards.

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### Summary:

| Issue | Recommendation |
| ------------------------- | --------------------------------------------- |
| Undervaluation risk | Avoid undervaluation, declare market price |
| Agreement | Draft detailed, stamped agreement |
| Tax liability on transfer | Pay stamp duty & tax on fair market value |
| Payment terms | Clearly specify payment & possession schedule |

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If you want, I can help draft a basic agreement template or give you pointers on clauses to include. Would that help?

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