Hi,
Need your kind advice on how to deal with a situation that leads to dealing with Cash that is not on the books.
I am an NRI and bought a property in India with Money transferred from Abroad (Taxes fully paid on the money before transfer in the source counrty).
1. Bought the real estate property. Wanted to pay the 100% money as Cheque through local bank to keep the transaction is clean.
2. Seller was willing to take the entire transaction as Cheque. So no problem there.
3. Went to the Sub-Registrar office to register the property for 100% of the trasaction amount.
4. Sub-Registrar REFUSED to record the transaction stating for the property location the GOVERNMENT assesed Value is only 45% of the MARKET value.
5. In this situation, I had no choice but to pay the 55% in CASH to the seller.
Now, when I sell the property, same story repeats and I will have to take about 55% of the MARKET value as CASH because the GOVERNMENT value is only 45% of the Market Value.
In this transaction, About 55% of the money got converted into CASH which is also referred to as BLACK money.
Obviuosly, some of you would immediately jump to say, YOU SHOULD NOT have entered the transaction knowing the money is getting converted to CASH. Sorry, I have a family to feed and India's growth story is too good to pass up. So as an NRI I would think that bringing foreign currency to India is a good thing for India and also good for my personal self.
My Questions are:
1. Why does the Sub-Registrar (LAW) Refuse to Record transaction at 100% Market value forcing the Money to be converted to CASH.
I have seen numerous threads on this forum talking about How CAs can help curb Black Money. Here is your chance to help. How would you suggest I deal with situation in future transactions?
2. Is there a way for me to convert the CASH back into banking system when the property is sold?
I have read numerous EXPERT responses on converting CASH to white money to say simply pay taxes on the balck money and convert.
But, In my situation all the money involved was never illegaly obtained and I am happy to pay any capital gains taxes due when the property is sold.
Thanks for your comments.
CAclubindia
