Black money while buying a property

[rkrishna]

AFIK, most banks (ICICI/HDFC) provide loans against the registration value only (not for the black part of the transaction)

[nagarjunkatta]

Hi Rangavittala,

Can u name those public sector banks which gives a DD(2nd part) without the A/c number?

Cheers
Nagarjun

[msn1270]

Rangavittala is unknowingly misguiding the core theme of this thread i.e. tracebility of the cash movement. Below are my opinion.

1) Once the buyer & Beneficiary(Seller) PAN no document is given to the central Processing centre of the banks, same will be attached to the beneficiary name for any no of DD's he takes on that day for that application processing. Also all high value transaction records will be forwarded to RBI on daily basis. Hence whether you take DD's with a/c no or without, it makes no difference.

2) Any cash transaction higher than Rs. 49,999/- Identity and PAN no info recording is mandatory for all Banks. So while encashing also, the Beneficiary identity gets attached.

3) As per RBI recent instruction, many banks are not encashing high value transactions. I think Rs. 5 lakhs and above(correct me if i'm wrong). It will be done only by ECS to the beneficiary account. Even in Post offices, redemption/encashment of anything above Rs.20,000 is given only by way of Cheque.

Summary: Money Movement between two people for a transaction involving the bank loan can be traced anytime with records by RBI or Income Tax Department.

[mahan123]

Good to see many responses.
From the day 1, when I decided to buy a property, I have made my mind not to give single rupee as Black.
Coming to the discussions here...
We are all talking about how sellers deal with money and make it black.
Still one question prevails... Is it not BAD to involve in such dealings knowingly or unknowingly.
I believe most of us in this group and in this discussion are young. We somehow try to get some deal done, end of the day putting morality down!!!
Are we not responsible to build a moral based, clean society for tomorrow?
If we young people think this way, then how young generation will help this country to be safer and to be more powerful?

[msn1270]

Mahan, I appreciate you opinion.

This is the typical Indian mentality in majority of our current Generation. When things are not in their control, they promptly follow. Ex:- The salary Class, when the Professional and Income Tax is deducted at the source itself as per their earnings. Nobody questions it & many people doesn't even look for that part in their pay slip.

When things are in their control, always people look for the ways to manipulate the numbers to get the maximum personal benefit and in majority of the situations, they deviate from the principles knowingly, Like filing Service Tax, Stamp Duties, paying in Cash....etc.

I remember one of my known experience 3 years back, where one of my known senior citizen had put his 30X50 plot in Railway Layout(Bhavani nagar II Stage) near SMV 5 Block for sale. Seller was an honest person and was very particular about registering the transaction at the Agreed Value, not against Govt Guidance Value. But the buyers were not ready for this clause, instead they're requesting them to register at the Guidance Value and take the remaining in Cash. It took more than 2 years for them to dispose in a transparent way.

[bboy]

I believe alt least some of our salary classes are ignorant of the laws and rules. They think that the TDS made from their pay check is the end of their tax responsibility and don't bother to file their tax returns. When they talk about their after tax income, they always mention their take home pay on the salary slip. Have no clue that their actual tax liability could be higher or lower and is dependent on their other incomes too! They just submit to their fate (TDS) and curse the government!

Mahan, I appreciate you opinion.

This is the typical Indian mentality in majority of our current Generation. When things are not in their control, they promptly follow. Ex:- The salary Class, when the Professional and Income Tax is deducted at the source itself as per their earnings. Nobody questions it & many people doesn't even look for that part in their pay slip.

When things are in their control, always people look for the ways to manipulate the numbers to get the maximum personal benefit and in majority of the situations, they deviate from the principles knowingly, Like filing Service Tax, Stamp Duties, paying in Cash....etc.

I remember one of my known experience 3 years back, where one of my known senior citizen had put his 30X50 plot in Railway Layout(Bhavani nagar II Stage) near SMV 5 Block for sale. Seller was an honest person and was very particular about registering the transaction at the Agreed Value, not against Govt Guidance Value. But the buyers were not ready for this clause, instead they're requesting them to register at the Guidance Value and take the remaining in Cash. It took more than 2 years for them to dispose in a transparent way.

[ravivasudeva]

Last week i saw 2 properties in BSK 5th stage and both the parties want black money. They want me to pay the guidance value as white and rest as cash which i didn't agree. I can't even get enough home loan just by showing the white part. Understandably they are doing this to avoid Capital gain tax but whats the harm in paying this tax when you made huge profit? The 1200 square feet plot that was allotted to him in 2001 for a mere 1,30,000 rupees where as he is selling it now for 51,60,000 rupees. The land owners have become really greedy.

[amit_pearl2]

What if both the buyer and seller agree for complete white transaction. In this case is it must the that buyer register for agreement value?

What would be the implication to the seller and buyer if the buyer registers the at price quite higher than guidance value but lesser than the
market value or agreement value. Here the seller would be investing in another property.

The reason for registering at lesser price could be due to short of funds for registration. Is above transacation legal and acceptable?
Yes i understand the buyer may save some amount right now but if his property is taken away then he would be compensated at
registration value.