Can i buy plot more than dlc/circle rate. In my case, circle rate of 240 sq mtr plot is 4700 per sq. mtr and i do not know market value of that area and i am buying plot from seller in 8700 per sq. mtr.
1. is there any mistake with this deal ?
2. any tax complications ?
3. any extra amount has to be paid at a time of sell after 20 years except capital gain tax ?
Legality: It is completely legal to buy property above the circle rate.
Stamp Duty: You must pay stamp duty based on the actual purchase price, not the lower circle rate.
Taxation: There is no tax penalty for paying a higher price; in fact, it helps establish a higher "cost of acquisition," which can potentially reduce your capital gains tax burden when you sell the property in the future.
Recommendation: Always ensure the full and actual consideration amount is reflected in your sale deed and that all payments are made through trackable banking channels (account payee cheque/online transfer).
Chirag N Shah & Associates
Mumbai
CA Inter
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