How to handle difference between sale agreement and sale deed price

Capital gain is taxable at circle rate, doesn't matter if u sell the plot at 53 or 25 lakhs, full value of consideration will be deemed to be the fair value as per the circle rate provided the difference is more than 5%.

It is always advisable to complete the transaction through bank account and refrain from any cash transactions.

To sum up if u sell at 25 lakhs the difference between circle rate and transaction amount will be deemed to be the capital gain and tax will be charged accordingly.

Please wait for others to comment as well

Sir. thanks for the reply.

1. Actual price I am going to sell - Rs. 53 lakhs.

2. Value of the property as per circle rate - Rs. 25 lakhs

3. Sale deed will be made for - Rs. 25 lakhs

4. Difference between sale deed price and the actual amount I am going to receive - Rs. 28 lakhs.

My question is specifically on this differential price of Rs. 28 lakhs. I am ready to declare this as capital gains and pay tax if necessary (after applying indexation).

But, from legal point of view, I will have no supporting document to show that this amount I received was because of selling the property. (Because, sale deed, which is the only valid document legally will show only Rs. 25 lakhs as total consideration value).

What if the assessing officer takes a stand that he/she will consider this amount of Rs. 28 lakhs as income from other sources and levy 30% tax?

That is what i said full value of consideration will be deemed to be the circle rate, suppose 55 lakhs, since they are already adding back the amount they cannot do it twice

You mentioned that you have recorded sale value of 53L in sale agreement. So u have that agreement as an evidence. But you will only be able to use it if get the complete 53L by cheque/NEFT/ RTGS. Otherwise if you take partial cash and declare it in income tax return you will penalised by provisions of sec 269S.

Khushboo meat 269SS, and yes i missed this point.

there's no need to panic... let the transfer be registered at any price... capital gain will be charged on sale consideration or stamp duty value whichever is higher... if you have the documentary evidence (sale agreement copy) to substantiate your statement, the balance 28 lakhs will be charged as capital gains only and it won't charged in other sources. make sure that you receive sale consideration in excess of 2 lakhs through banking channel to avoid the provisions of section 269ST

Originally posted by : rama krishnan
	there's no need to panic... let the transfer be registered at any price... capital gain will be charged on sale consideration or stamp duty value whichever is higher... if you have the documentary evidence (sale agreement copy) to substantiate your statement, the balance 28 lakhs will be charged as capital gains only and it won't charged in other sources. make sure that you receive sale consideration in excess of 2 lakhs through banking channel to avoid the provisions of section 269ST

NO..NO..way before the 269ST triggers the section 269SS will trigger at threshold of 20000/- rupees ...so any cash paid above 20000/- will trigger 269SS resulting in 100% penalty on sum accepted/received...

For computation of capital gains, we take higer of actual sale consideration and circle rate as SALE PRICE. So, unless you have any documentary evidence that 53 lac is the sale consideration, the AO will not treat the remaining 28 lac as sale consideration. If you receive this 28 lac through any mode other than cash (which I doubt the buyer will be ready for) then the AO may draw an inference but again, the cross examination of buyer is needed and he will never admit it as that can become a reason for his scrutiny itself.
As far as the cash receipt is concerned, please don't receive this cash as it attracts huge penal provisions under section 269SS nad 269 ST. Buyer will bear nothing in these sections but you will be penalised. So in my opinion, if you are willing to pay all your legitimate taxes on this transaction, it us better to wait for some other buyer who can pay you everything in white.

Dear Mr Biswajeet

Kindly have an agreement entered into for Rs.53/- or any other consideration which both of you have agreed upon.  In the said agreement mention the bank account also to be transferred and get only in that bank account either through RTGS / Account payee cheque the consideration.  Mention in the agreement that as a seller you will transfer / execute the sale deed as per the directions of the Purhcaser either to the Purchaser or to his Nominee as the case may be within the specified time.  Get the agreement duly notarised and admit the entire consideration for purposes of computation of capital gains and pay tax accordingly and also pay the tax accordingly.  It would be better you pay the tax deductible by the Seller also and claim refund of tax evenif you claim ithe Capital gains as exempt.

Hi Biswajeet,

I'm facing the exactly same issue. Can you please tell how did you go about it.

A sale deed is a legal document. This document showcases the transfer of title, rights, and ownership of a property from a seller to the buyer. This document contains all the information about the transfer of ownership. In order to prove ownership of the property, legal proof must be provided. This is what a sale deed is in its most basic form.

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The GST payment option in India is one of the most important features of the Goods and Services Tax (GST). The GST payment option allows businesses to pay their taxes directly to the government. This means that they do not have to pay any tax at all. Instead, they just have to pay their taxes. This is a huge benefit for businesses in India who are looking to make a profit without having to pay any tax.

Also Get the Know more about the GST Verification and GST Status.