Income Tax:1980 Built Primary residential house selling

POSTED BY Samrat sarkar ON August 20, 2012 2:56 am COMMENTS (2)

I am an NRI. My father is conservative retired senior citizen living in India. He is selling his primary residential house (built in 1980). He will renting thereafter. ( He is not going to buy any property or gold !)
The buyer is offering us 80% white money-documented (Bankers cheque) and 20% cash( not documented). 
Total selling price of the house is almost 1 crore.
  1. Is there an easy way to convert the 20% cash (20 lakhs) to white ?
  2. Can we deposit the undocumented 20% cash into bank savings account ?
  3. Is there going to be any headache for accepting the 20% cash from the buyer?
(We are ready to pay all Government Taxes and want to make the transaction simple, hassle free and clean.)
We are looking to for your advice. Thanks in advance.

2 replies on this article “Income Tax:1980 Built Primary residential house selling”

  1. Samrat sarkar says:

    The purchase or the construction price of the house in 1980 might be max INR 4 lakhs plus ongoing maintenance cost. (Keeping update cost).
    I don’t know why he wants to pay the 20% amount in cash.
    Is there any legal risk to deposit the 20% cash amount into Bank Savings account ?
    (We are ready to file tax on the whole amount 1 crore).

    Do you suggest not to take a single rupee in cash ?

    How much tax we have to pay if we rent after the sale ? ( We are not interested in buying real estate in India)
    We want to be 100% legally conservative!

  2. Dear Samrat, why the buyer is not offering all white? Any reason? What was the purchase/construction price of this house in 1980?

    Please do note, there ‘ll be Long Term Capital Gain Tax liability on this 80L or 1C figure after adjusting the purchase price for indexation.

    Thanks

    Ashal

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