Posted on April 11, 2021
The scope of Section 50C has been extended to w.e.f. A.Y. 2010-11 to the transaction executed by sale agreement or proxy by inserting the word “evaluable” with the words “the value thus accepted or assessed.” No no. The property must be registered with stamp duty or actual sale, according to the highest value. Property Registry is one of the most curious topics for any buyer. What matters most is whether you are buying a resale or a property under construction. Property Registry is crucial and is a final step in the purchase of real estate. Normally, a buyer is disoriented by unique proposals from owners/lawyers in the real estate registry. In many cases, banks also set conditions on the real estate register. Each party has its own motive/logic, as the real estate registration is executed.
The registration fee must be paid to acquire the property transferred and registered (in addition to stamp duty) on your behalf. The levy is subject to a ceiling of Rs 30,000 (or 1% of the market value, or contractual value), which varies from country to country. A purchase agreement is an agreement to sell a property in the future. This agreement sets out the conditions under which the property in question is transferred. As in Section 43CA – 50C of the Act, where the assessment of stamp duty is greater than the contractual value, the difference between the value of stamp duty and the contractual value of income tax under the head “Revenue from Other Sources” is charged to the buyer. The Supreme Court of India in 2012, in the case of Suraj Lamp – Industries (P) Ltd (2) v. State of Haryana, while content with the validity of the sale of real estate by proxy, held as follows: Stamp duty and registration fees play a decisive role in this regard. A buyer`s primary goal is to save tax. The owner or seller plays with this psychology of a buyer – try to minimize the value of real estate records. Some time ago, I wrote an article on how to store property registration fees. It could or may not be beneficial in all cases. Normally, buyers are not able to assess the impact of the low value of the real estate registry on the capital gain at the time of purchase.
I always suggest that my clients take a balanced approach. A stamp duty saving at the time of purchase cannot offset the additional capital gain at the time of sale. The approach should be financially advantageous based on the investment horizon, revaluation, tax bar and various other factors.