REGISTRATION VALUE OR THE GUIDANCE VALUE OF THE PROPERTIES REGISTERED – TAX EVASION – PENALTIES – TAX EVADERS GOT RED HANDED – RBI -INCOME TAX DEPARTMENT – STAMPS AND REGISTRATION DEPARTMENT – STAMP DUTY EVASION – PENALTY – 10 TIMES THE TAXES EVADED


In a bid to reduce or evade the stamp duty at the time of registration, the buyers and the sellers of the properties, have not SHOWN  the real sale price or consideration in the registered sale deed, but 90% of the buyers have borrowed money or availed institutional finance under HOME LOAN scheme, have falsified or deliberately undervalued the properties during the REGISTRATION PROCESS.

The Reserve Bank of India, being the central bank, governing all the banks in India, has all the details about the SALE AGREEMENT,(based on the sale agreement, the housing loans are sanctioned by the banks) and the SALE DEED.  It is very easy to detect the discrepancy or the undervaluation.

STAMP DUTY evasion invites 10 times the penalty of the STAMP DUTY EVADED, while, misrepresenting or concealing the actual consideration will invite CHARGES under several ACTS.

The Income Tax department has detected many such illegal transactions and are investigating too many such cases across the country and it is reported that over 30% of such tax evasion, misrepresentation and tax evasion are all in properties across BANGALORE alone.

Await the Tax Sleuths at your door steps soon for those who have different values in the SALE AGREEMENT and registered the property for LESSER VALUE in the SALE DEED.

REGISTRATION OF PROPERTIES AT A VALUE LESSER THAN THE ACTUAL SALE VALUE OF THE PROPERTY TO EVADE STAMP DUTY AND INCOME TAX


A News Report of real estate transaction in Bangalore Mirror on 13-07-2016

Woman entered into a deal to sell her property, but faced trouble when buyer refused to pay the ‘remainder’ 

The High Court of Karnataka has allowed a 75-year-old property owner to initiate a cheating case against the buyers of her property who allegedly refused to pay her the amount that was negotiated for. The property was registered for a lesser amount than what was mutually agreed, as is the norm with most property registrations. But in this case, the purchaser allegedly refused to pay the ‘remaining’ amount while paying her only the amount mentioned in the sale deed.

An US national came to Bengaluru to sell her property in 2013 and entered into an agreement to sell with  for a consideration of Rs 2 crore. However, this transaction did not fructify. Later, an agent got her a deal to sell the property to one  XXXXXXXXXXXXfor Rs 6,58,20,000. However, the sale deed for registration was prepared only for Rs 4,32,20,000.

The Landlady alleges that she was not paid the difference amount and hence she refused to give up possession of her property.

She complained to the  police that she was being forced to give up possession of the property without the balance amount being paid to her. The police did not register an FIR but gave her an ‘endorsement’ that it was a civil dispute and hence she should approach the court.

Thereupon, she approached a civil court, which refused to give an injunction against the property purchasers and she claimed that she was forcibly thrown out of the property and then approached the HC for justice.

The HC noted that there was “some semblance of criminal intention on their part.” of the buyers,  It also castigated the police for not filing an FIR. “This court is unable to understand as to how the  police could refuse to register the complaint and issue such an endorsement.” The court said the case was unnecessarily being pursued in the civil court.

Relegating the case to the magistrate court  and directing the seller “to file appropriate complaint and seek appropriate direction to the jurisdictional police for investigation and registration of the complaint for the offences alleged against the defendants”, the court also allowed her to proceed against the purchasers to recover the amount due to her.

—————————————————————————————————————————————————-

REMARKS-

UNDERVALUING THE PROPERTY – STAMP DUTY EVASION – INCOME TAX IRREGULARITY – CAPITAL GAINS – PENAL PROCEEDINGS – REPATRIATION OF FUNDS ABROAD

Income Tax Department might step in along with the Department of Stamps and Registration to conduct an enquiry into the TAX – for the difference amount.  Amount negotiated and the Amount shown in the Sale Deed.  The difference of stamp duty + 10 times the penalty and the Income Tax + Capital Gains + Penal proceedings from the IT Investigation Wing.

If the property is bought for X price and registered it for Y price, to evade stamp duty and Income tax, both the departments will have conduct enquiry and the amount `Y` has to be assessed to tax.

The liability towards the stamp duty is the DUTY NOT PAID OR EVADED on the OTHER amount Plus 10 times the penalty and the income tax (TDS) + recovery proceedings by the IT department.


There are many financial institutions provide home loans and some of them by-pass the RBI directives and assist the buyer and seller to EVADE stamp duty.  This is not very difficult to investigate.  The actual sale agreement is for Rs.1,00,000/- and the loan sanctioned is also on the basis of the sale agreement and 75% or 80% of the value shown in the Sale Agreement.

But, the SALE DEED registered is for Rs.50,000/- by undervaluing the property and EVADE STAMP DUTY.

The penal proceedings:

STAMP DUTY HAS TO BE PAID FOR THE DIFFERENCE AMOUNT OR TAX EVADED AMOUNT OF Rs.50,000/- at the prevailing applicable rates and 10 times the penalty of the TAX EVADED AMOUNT.

If this discrepancy or illegality is brought to the notice of the RBI, the RBI might be compelled to initiate appropriate proceedings against the bank or financial institution and direct the BANK to proceed with the immediate recovery of the amount LENT to the borrower.

 

PROPERTY REGISTRATION MARKET VALUES MAY BE REVISED BETWEEN 02-11-2015 TO 05-11-2015 IN BANGALORE


The Stamps and Registration Department might be revising the Guidance values of the properties in the Bangalore Rural and urban Districts between 02-11-2015 to 05-11-2015.  It is learnt that a decision has already been taken and will be announced soon.

The New Guidance Values will reflect the latest market values of the properties and there was a section/group, which requested the Govt not to increase the guidance or market values for the registration purpose as the realty sector reeling under severe pressure.

There is an average increase of about 10% to 30% in the property registration values in and around bangalore, coupled with 30% to 40% increase in the municipal taxes will definitely bomb the market and will drag it down to 5 years low in prices.

The prices of properties are not looking up except in the builders advertisements and brochures and the rental market is down by 10% to 40% in the IT belt.

DID YOU CHECK AND VERIFY THE VAT TAX, SERVICE TAX, BESCOM DEPOSIT AND BWSSB DEPOSIT CHARGED BY THE SELLER/DEVELOPER ?


ONE OF OUR READER HAS DONE A CALCULATION OF VALUE ADDED TAX, SERVICE TAX, BESCOM DEPOSIT, BWSSB DEPOSIT, LEGAL CHARGES, GENERATOR CHARGES, STAMP DUTY AND REGISTRATION FEES, WHICH WORKS OUT AT OVER 20% OF THE STATED OR QUOTED PRICE OF THE PROPERTY, APART FROM THE CHARGES PAID OR PAYABLE FOR OBTAINING THE BANK LOAN, WHICH MAY BE ANOTHER 1/2% OR 1%.

IN SOME CASES, THESE CHARGES AMOUNTED TO OVER 25% AND 75% OF THE CASES, THE BUYERS DO NOT HAVE KATHA FROM BBMP, STILL HAVE TO REMIT THE BETTERMENT CHARGES AND PAY THE KATHA FEE, WHICH WORKS OUT AT APPROXIMATELY AT 1%.

Many of the buyers are under the wrong impression and notion that the approval or sanction of BANK LOAN will confer the best right, title and interest of the property.  IT IS WRONG. 

TAKE CARE. CHECK THE CHARGES. DEMAND THE BILLS. DEMAND THE RECEIPTS. 

THE MARKET VALUE OR GUIDANCE VALUE FOR REGISTRATION OF PROPERTIES IS UNDER REVISION


THE CVC HAS PUBLISHED THE GUIDANCE VALUE FOR THE BANGALORE URBAN DISTRICT AND INVITED OBJECTIONS FROM THE PUBLIC, TO BE SUBMITTED WITHIN 15 DAYS FROM 07-10-2014.  THE OBJECTIONS ARE BEING EXAMINED.  THE REVISED GUIDANCE OR MARKET VALUE OR THE REGISTRATION VALUE TO CALCULATE THE STAMP DUTY AND THE REGISTRATION FEE WILL BE PUBLISHED SOON.

IT IS LEARNT THAT THE AVERAGE INCREASE IS IN THE RANGE OF 20% TO 30%.  BUT IN THE BANGALORE NORTH THE VALUES HAVE SHOP UP IN SOME AREAS BY 100% AND THOUGH THE GUIDANCE VALUES HAVE BEEN INCREASED BUT THE REAL MARKET VALUE IS MUCH HIGHER.

HENCE, THERE IS LONG Q IN THE SUB-REGISTRAR OFFICES IN BANGALORE URBAN AND RURAL DISTRICTS AS THE PROPERTY BUYERS THINK THAT THERE WILL BE A REVISION FROM 01-11-2014.

JOINT DEVELOPMENT AGREEMENTS EXECUTED FOR APARTMENTS AND LAYOUTS – UNDER REVISION – STAMPS AND REGISTRATION DEPARTMENT –


THE STAMPS AND REGISTRATION DEPARTMENT HAS DETECTED TAX EVASION IN THE JOINT DEVELOPMENT AGREEMENTS EXECUTED BETWEEN THE LAND LORD AND THE DEVELOPERS AND BUILDERS AND HAS REOPENED THE FILES BY ISSUING NOTICES TO THE CONCERNED LANDLORDS AND THE BUILDERS/DEVELOPERS.

IT IS FELT THAT THE DUTY LIABILITY ALONG WITH THE FINE WILL BE IN TUNE OF CRORES FOR THESE PROJECTS, THE BUYERS MIGHT ALSO FEEL THE HEAT OF THIS INVESTIGATION.

EVEN THOUGH, SOME SUITS ARE BEING CONTESTED IN THE HIGH COURT, BUT NONE OF THEM HAVE REACHED ITS FINALITY AND WITH THE FRESH NOTICES, THE SITUATION FOR THE DEVELOPERS AS WELL AS LAND LORDS APPEAR TO BE VERY GRIM.

PERMANANT VALUATION CELL FOR THE REVISION OF GUIDELINE VALUE OF PROPERTIES IN KARNATAKA


THE GOVERNMENT HAS APPROVED THE INSTITUTION OF A REGULAR VALUATION CELL FOR THE REGULAR VALUATION OF PROPERTIES ACCORDING TO MARKET PRICES OF THE PROPERTIES FOR THE REGISTRATION. IT IS EXPECTED THAT THE GENERATION OF REVENUE FROM THE REVALUATION OR REVISION OF THE GUIDANCE VALUE ACCORDING TO THE MARKET TRENDS OR MARKET PRICES, WILL BE AROUND RS6500 CRORES, A JUMP OF ALMOST RS2000 CRORES FROM THE ESTIMATED REVENUE.