Confusion in Sale Deed value vs Registration Value

POSTED BY chhayakant ON February 11, 2014 12:02 pm COMMENTS (12)

Recently I bought an apartment. As it’s a under-construction property, I got one sale agreement with amount “X” & another construction agreement with amount “Y”. Now will the sale deed reflect X+Y or only “X”. Builder says sale deed should constitute only amount specified in sale agreement. Is it correct?

Again when we register the property would it be on guidance value? In that case the registration would differ from the value specified in sale deed, is it ok?

12 replies on this article “Confusion in Sale Deed value vs Registration Value”

  1. Supriya says:

    I am planning to buy a newly constructed flat with sale agreement value of Rs. 58lac. Per guidance value, the flat cost is Rs. 39lac. I have few queries as below:
    1. Which of these two values does bank consider for sanctioning loan?
    2. Should I register the flat on guidance or sale value?
    3. Are there any drawbacks of registering the flat on guidance value in future in case of resale?

    1. They will consider Agreement value, whats one paper is the reality !

      2. On Sale Value, here is the reason – https://www.jagoinvestor.com/2013/06/paid-black-money-for-property-and-saved-for-stamp-duty-and-registration.html

  2. Naresh says:

    Hello Sir,

    I recently bought a BBMP approved flat in Bangalore.
    While booking the flat a sale agreement of 39 Lacs was made.
    During registration of flat, I got a Absolute Sale Deed and EC of value 32.56 Lacs.
    Is it correct ? Is the Absolute Sale Deed less than the Sale Agreement value? Shouldn’t it be same ?

    1. Hi Naresh

      Thanks for asking your question. However, I dont think I am eligible to answer your query as its either out of scope of my knowledge or its not related to money matter directly

      Manish

  3. Nishant says:

    Hi, I am buying a ready to move in flat already registered in the name of land owner.i have done sale agreement of 4990000, now owner is asking for making sale deed on government value which is 36,66,500. Should i go ahead like this and why or should i go ahead in having sale deed of same registration value and why. Pl elaborate both the cases.

    1. If register it at lower amount, then when you sell it later, your profit will look more and more tax to you!

  4. Balakrishna says:

    I have similar issue however in my case (1) Sale agreement(in my case 9.5 lacs) & (2) construction agreement(in my case 19.8lacs). Now builder is telling me that sale deed would be done based on govt guidance value; based on which it comes around 23lacs, however in the Sale Deed he said will show sale consideration value only for 9.5 lacs which is equal to Sale Agreement. Now I would like to know is it correct? and what’s the consequence of that?

  5. ashalanshu says:

    Dear Chhayakant, in your case as the registration of land ‘ll happen @ 42L Rs. amount which is less than 50L Rs. TDS is not applicable.

    Thanks

    Ashal

  6. chhayakant says:

    Thanks Ashal. One more query on the same topic, now there is a new rule of 1% TDS on buying property greater than 50lacs. As builder will be doing the sale deed on 40 lacs, do I need to deduct TDS amount? Catch is total amount exceeds 50lcas but the sale deed amount is less than 50lacs.

    Thanks
    Chhayakant

  7. ashalanshu says:

    Dear Chhayakant, if you do have payment receipts for the construction amount as well as a separate construction agreement, you can easily prove the combined valuation of 72L Rs. later on. So go ahead and opt the registration. Make sure you do have receipts and agreement for remaining 30L Rs. So that in future if you sell at 80L Rs. the profit amount ‘ll be only 8L Rs.

    Thanks

    Ashal

  8. chhayakant says:

    I have a booked a under-construction flat in Bangalore for 72 lacs. In Bangalore, builders prepare two agreements with buyer (1) Sale agreement(in my case 42 lacs) & (2) construction agreement(in my case 30lacs). Sale agreement is basically for selling the undivided share of land & construction agreement is for constructing the flat.
    Now builder is telling me that sale deed would be done based on govt guidance value; based on which it comes around 42lacs, almost same as cost specified in sale agreement. Now I would like to know is it correct? and what’s the consequence of that?

    Let’s tomorrow if I re-sell the property for 80lacs, do I have to pay tax on profit of 38lacs(80-42) or I have to pay tax on profit of 8lacs(80-72) as value of construction agreement & sale deed would sum up to 72lacs.

    I am suspecting builder doing all this just to save tax by not showing cost towards construction agreement, so wanted to confirm.

    Thanks

  9. ashalanshu says:

    Dear Chhayakant, can you elaborate your query? I’m unable to understand it.

    Thanks

    Ashal

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