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I want to sell my house for Rs 10 lakh but the buyer is interested in declaring the market value which is Rs 5 lakh and pay stamp duty accordingly. But I insist on receiving the entire amount of Rs 10 lakh in demand draft. Can I get the sale registered for a consideration of Rs 5 lakh for stamp duty purposes while at the same time receiving Rs 10 lakh in the form of demand draft? I want to do everything in a legitimate fashion. I am willing to invest in tax shelters.

Your dogged insistence on following the path of rectitude is indeed laudable. The buyer it appears does not want to expose himself to greater tax liability.

Both of you may get away for the time being by receiving a demand draft for Rs 5 lakh in front of the registrar but could land in trouble if the fact of your receiving another DD for Rs 5 lakh comes to light because stamp duty is always payable on actual consideration or market price, whichever is greater. Therefore if you want to be above board with the income-tax authorities, you should be above board with the registrar as well. If this costs you the extra stamp duty, so be it.

S. MURLIDHARAN

More Stories on : Income Tax | Real Estate & Construction | For the Asking

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