Difference in amounts in sales deed and sale agreement value

Q: Hi, Anyone has idea on how to account the transaction for the difference in the amounts in government market value and actual sales value, while registration of a property. Usually we do this to save some registration and stmap duty amount.

shravankumarv15, Apartment Resident

29th September 2015

Legal in Kondapur, Hyderabad

registration;saledeed;salevalue

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Replies (3)

Hi
I believe it is a regular practice to register a property at a certain amount and actually sell it for a higher amount. This is done to
1) Reduce registration costs
2) Reduce the tax to be paid by the seller on difference between the last registration amount and the current registration amount if sold within 3 years

Ramya Janagam, Hyderabad

30th September 2015

Comment

@ shravankumar
The guideline value has no relevance at all in your case.The guideline value is the real consideration as against the value recorded in the sale document described as apparent consideration. Sec. 50C applies only to a case where the apparent consideration is lower than the real consideration. It is not permissible to show the guideline valuation as the sale price or for that matter any lower value than the real consideration. It would be violation of stamp law because of the lower stamp duty that is paid on the basis of lower consideration recorded in the document.

Ramesh Hegde, Hyderabad

29th September 2015

Comment

Hi ,
An agreement that declare all the terms and conditions of sale is necessary before settle a property deal. This agreement should be recognized by both the parties, the buyer and the seller. This is the base document which is used to construct the process of transferring the property. A sale agreement must be draft before formation of the sale deed.

Dhananjay, Hyderabad

29th September 2015

Comment

Thanks Dhananjay for sharing valuable information!! I would like to know what is the main point that I should look into sale agreement paper?

Gireesh Hegde, Hyderabad

29th September 2015

Some of the main points that should be included in a sale agreement are given below:
1)Name, address and the age of the buyer and the seller
2)Address of the property being sold along with description
3)Date and place of execution of the sale agreement
4)Rights of the buyer and the seller
5)Liabilities of the buyer and the seller
6)Details of how the property was purchased/received by the seller.
7)Amount, time and mode of payment.
8)Inspection of title deed
9)Timeline for completion of process
10)Transfer cost and party responsible for its payment

Sridhar, Hyderabad

29th September 2015