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RAGHUNATH (S/W Engineer)     03 March 2021

Declaring income from sale of plot in IT returns


I am planning to sell my plot. The buyer is willing to show only the Government Rate of the plot in the Sale deed and wants to pay the remaining amount (i.e., Market Rate minus Government Rate) by cash.  He is doing this so as to save on the registration costs.
Can I ask the buyer to do online transfer of the remaining amount (instead of me accepting it by cash).? If so, can I declare only the Govt Rate (mentioned in Sale Deed) while filing IT returns.? 

Or should I declare the full Market Rate in the IT returns (even though the Sale Deed mentions the Govt Rate value).?

In a few months, this whole money will be spent on the construction of a house on my another plot.


 7 Replies

Rama chary Rachakonda

Rama chary Rachakonda (Master in Accounts & Lawyer email voice no:9989324294)     03 March 2021

Tax on capital gain is amount minus purchased amount of flat as per document.Tax is exempted if you start construction within 6 months from sale of property.

sabyasachi mukherjee

sabyasachi mukherjee   03 March 2021

You hv to disclose your sale of plot in itr.
Spurto Consultancy Services

Spurto Consultancy Services (Consultant)     03 March 2021

All the amount which you will receive via bank mode have to be shown as Sale value of plot of land. 

Further the deed will also be of actual sale amount received via bank. 

Further, if you will receive the remaining amount by cash mode then you can show lesser sale value. 

sabyasachi mukherjee

sabyasachi mukherjee   03 March 2021

If the buyer wants to pay the amount of govt. rate via bank mode.
Rest thru cash.
If you want disclose the entire amount then it will be govt. rate plus differential market rate.
Now if the differential amount is less than 5%. You can reveal the entire amount in itr.
Kapadia Pravin

Kapadia Pravin   03 March 2021

Capital gain will be calculated only on Agreement consideration amount which is as per Govt rate.
sabyasachi mukherjee

sabyasachi mukherjee   03 March 2021

Not necessarily if the buyer and seller agree then it can be revealed what is mentioned in the deed?

RAGHUNATH (S/W Engineer)     03 March 2021

Thank you all for the responses.


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