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Huge cash withdrawal

nriowner (engineer) (35 Points)

28 February 2017

I purchased a property 3yrs back with 100% white money.

But the seller insisted on paying in cash. I ended up paying in cash in 2Crs. and closed the bank account as i moved from that area.

Now income tax dept is asking for old bank transactions. Will I be in trouble if income tax dept finds out that i paid in cash? if so, what kind of trouble would it be? Will they have authority to fine me because i withdrew white cash?

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14 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 28 February 2017

Whether the seller accounted the cash in his books of accounts? Do you have all the receipts of the cash payments? Whether the purchase deed of property is for 2 Crs?

1 Like

(Guest)

section 69 will apply investment will add to this year profit

and u will ask to pay tax on it

nriowner (engineer) (35 Points)
Replied 28 February 2017

I am not sure the seller accounted the cash. We had written the deed on a stamp paper for 4cr. But the property was valued by the registrar at 2cr (that was paid through bank). And an additional 2Cr was paid in cash.

Income tax dept has gotten that stamp paper deed and they are asking us to provide all the bank transactions made during that period.

nriowner (engineer) (35 Points)
Replied 28 February 2017

Income tax dept has gotten that stamp paper deed and they are asking us to provide all the bank transactions made during that period.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 01 March 2017

What was the purchase price declared by you in ITR?

nriowner (engineer) (35 Points)
Replied 01 March 2017

all the money was earned in USA and was transferred to local indian bank account(not NRE). I dont think i need to show purchases in ITR.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 01 March 2017

That means you can stand on the figure of 4 Cr. purchase price? Totally paid with receipts of cash and cheques!!

nriowner (engineer) (35 Points)
Replied 02 March 2017

Yes, total 4Cr paid in cash/cheques. My bank statement clearly shows all the details. But is it against law to withdraw huge amount in india prior demonetization?

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 02 March 2017

"But is it against law to withdraw huge amount in india prior demonetization? " Not at all.

"all the money was earned in USA and was transferred to local indian bank account(not NRE)." Hope that money earned in USA had no tax liability in India. I mean what was your status as per IT act for that particular year?

nriowner (engineer) (35 Points)
Replied 13 December 2017

Hi, I am still stuck with my original problem posted on this thread. Income tax official is behind us asking for the bank transactions of the closed account.

I want to know what will be the consequences if -

1. I provide the bank transactions to the income tax official -

a. Will there be any sort of fines from income tax dept because i paid 2cr in cash to the seller? (i am some what confident that there will be no fines in this case as 100% of my money is tax paid and has no tax liability in India)

b. Will there be any fines from sub registrar(dept which registered property on my name) because I paid total of 4cr (2cr cash ) and the purchase was registered for only 2cr?

2. In other case, if i say that i do not have access to the bank statements or bank account number, is there any way the income tax official can get the details of the closed bank account(NRE account opened online)? My account was never linked to PAN.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 13 December 2017

1 a. If deed specified it as 2 Crs........ definitely some sort of harrassment !!

1b. If transaction established for 4 Crs. warrants can be expected for difference of stampduty with interest.

2. Not at all difficult.

nriowner (engineer) (35 Points)
Replied 13 December 2017

Thanks a lot for your response.

1.I want to know under which law, the IT officer can harrass me because i paid cash. ( my money is all tax paid).

2. the sub registrar valued the property at 2cr by himself. How can he contradict that and ask me to pay additional stamp duty?Will it be a valid argument if i say that i have given that additional cash to the seller towards upgrades/furniture or may be as a gift?

3. If IT officer can get the bank details, I do not understand why he's been sending letters to me from past 1yr to disclose the source of all my incomes. He can just get the details himself and take next steps by now. I am not understanding where is the difficulty for him.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160332 Points)
Replied 13 December 2017

1. Because.....Your statement and the deed value do not match!!

2. That is the minimum value as per circle rate, but if established that you paid 4Cr. for the property but paid stamp duty for only 2Cr. that is TAX EVASION....... can ultimately put you behind bars.

3. Waiting for your response and final orders from their head. (These are legal steps to be followed)