I have agreed to buy a land for around 8 lac.
I started arrangements and planned before Indian government announcement denomination of 500 & 1000 bill.
I have the amount in my bank. The Buyer is not ready to accept the amount via Banking route. I prefer online transfer.
I am paying tax every year and I am not sure why the buyer/land owner need this in cash.
What are my options ?
Is there a tax me and land load need to pay if I transfer online ?
Can I give cheque ?
Is there a tax me and land load need to pay if I transfer online ?
Tax is not dependent on whether you pay in cash or do online transfer or Bank cheque. It is easier to evade taxes when the payment is in cash. It does not mean there will be no tax for transaction done in cash.
In a property deal, there is no tax to buyer. The seller has to pay capital gains tax. As the amount is less than Rs 50 lacs you need not with-hold any taxes from the payments. If the amount is more than Rs 50 lacs, you are support to pay only 49.5 lacs to seller and deposing 50K with Income Tax giving the PAN and other details.
It is to you advantage to have this property registered / sale deed at Rs 8 lacs. As this will be the cost, if you sell in future, for say 10 lacs, you will need to pay capital gains tax only on 2 lacs. If you register the property for Rs 2 lacs and pay the buyer in cash, then when you sell the property for 10 lacs, you will need to pay capital gains on 8 lacs.
Can I give cheque ?
Cheque and online transfer are same; unless you are giving him a bearer cheque which is as good as cash.
Please consult a CA and Lawyer to ensure you are doing a right deal.
