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In Mumbai, India, If I go for purchasing the flat then every broker/seller talks about "Flat Cost" and "Agreement value". I don't know what's the exact difference between them.

Also, for India, what is the tax amount to be paid while purchasing either under-construction flat or resale flat ?

Can someone guide me in this ?

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  • This means no property can be sold legally at a rate higher than agreement value ie registered value ???? Market price/ agreed and paid in cash to seller has no value even if buyer pays or wants to pay only in Cheque??? Nov 9, 2019 at 7:25

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broker/seller talks about "Flat Cost" and "Agreement value". I don't know what's the exact difference between them.

The "Agreement Value" is the value that will be shown in the sale deed. The home loan is given on this amount. The Registration and Stamp Duty are paid on this amount. If you sell the flat in future, the difference between the Sale price and Agreement Value is your Capital gains. So for all practical purposes the Agreement Value is the price you paid to get this flat.

The "Flat Cost" on other hand is Agreement Value plus additional costs that are imposed on buyer. This some times is the [Valid / legal] charges for additional amenities, additional improvements that cannot be put into agreement. However quite often, Builders are looking a black money and ask for additional cost to be made in cash. It is advisable not to enter into such transactions as they are illegal as well as pose a risk.

what is the tax amount to be paid while purchasing either under-construction flat or resale flat ?

On a New Ready Possession Flat or a ReSale Flat;

  • Registration Fee of 1% max of Rs 30,000
  • Stamp Duty In Mumbai Corporation - 5% [4% in Mumbai MMRDA, 3% in Mumbai Rural]

Note The higher of Government Ready Reckoner Rate or Agreement value is considered.

On Under-Construction;

  • Registration Fee of 1% max of Rs 30,000
  • Stamp Duty In Mumbai Corporation - 5% [4% in Mumbai MMRDA, 3% in Mumbai Rural]
  • MVAT of 1% on the Payment towards Balance Construction. For example a flat value is 25 lacs. At the time of booking work worth Rs 10 lacs is completed and paid immediately. The remaining 15 lacs is to be paid to builder as per completion of work in next few months / years. Then VAT is on Rs 15 lacs.

Note The higher of Government Ready Reckoner Rate or Agreement value is considered.

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