Consider the scenario
A purchaser and a layout developer enter into an "agreement to sell" for the purpose of transfer of a site in the layout for a specified sale consideration. For example let it it be Rs 10,00,000/- (ten lakhs only)
The purchaser agrees to pay Rs Ten laks for purchasing the site. The amount will be paid after taking a loan from the financial institution.
The guidance value as per government norms is Rs 5,00,000 (five lakhs only) and the conveyance deed (sale deed) is done for the amount of five lakh only and the moneys are transferred before the sale deed is executed.
After five years of the sale deed execution, the purchasers plans to sell the site in the layout.
For the purpose of capital gains, what will be considered as cost of acquisition. - Rs 5 lakhs or Rs 10 lakhs (assuming the sale deed registration has already been carried out)
Second scenario - if the sale deed is yet to be executed, is it advisable to register the property at the amount agreed in the agreement to sell (Rs 10 laks only) or at the government prescribed guidance value
Thanks
CAclubindia
