Property Tax - White & Black Money ???

[nitin_verma1]

Hi Guys,

Am looking few properties in India and as we know the concept..almost everybody is asking some percentage of money By Cheque(White money or number 1) and rest of the money by Cash(Number 2 or Black money.)

Let suppose am buying plot for 12 Lac.
Guy is asking 50% (6 lac.)white money and rest 50% black money(6 lac.)

Now here are my questions
1) When i go for plot registration, what amount i can specify ???
6 Lac? 12 Lac. ? or some other amount ?

2) How can i account for 6 Lac. cash amount... as am withdrawing money from my NRE account ?

3) Let suppose, i register the plot for 6 Lac. and later on sold in 20 Lac.
How much money will be repatriable ??

4) If i sold the plot in 20 Lac....do i need to pay capital gain tax on 14 Lac.(b'coz plot is only registered on 6 lac. ) or i pay tax on 8 Lac. (as i paid 12 lac. in total for the plot.)???

5) Is anybody doing transaction like this before? Any other ideas how to deal with this kind of situations. I know, we NRIs want to do good to india and i wanna register the plot on total price(12 lakh)..but its hard to change whole corrupt system. Till today i looked at almost 50 prime location plots and around 48 want the payment in White plus Black.

Please advise gurus.

[Ace Novice]

Hi Guys,

Am looking few properties in India and as we know the concept..almost everybody is asking some percentage of money By Cheque(White money or number 1) and rest of the money by Cash(Number 2 or Black money.)

Let suppose am buying plot for 12 Lac.
Guy is asking 50% (6 lac.)white money and rest 50% black money(6 lac.)

Now here are my questions
1) When i go for plot registration, what amount i can specify ???
6 Lac? 12 Lac. ? or some other amount ?

2) How can i account for 6 Lac. cash amount... as am withdrawing money from my NRE account ?

3) Let suppose, i register the plot for 6 Lac. and later on sold in 20 Lac.
How much money will be repatriable ??

4) If i sold the plot in 20 Lac....do i need to pay capital gain tax on 14 Lac.(b'coz plot is only registered on 6 lac. ) or i pay tax on 8 Lac. (as i paid 12 lac. in total for the plot.)???

5) Is anybody doing transaction like this before? Any other ideas how to deal with this kind of situations. I know, we NRIs want to do good to india and i wanna register the plot on total price(12 lakh)..but its hard to change whole corrupt system. Till today i looked at almost 50 prime location plots and around 48 want the payment in White plus Black.

Please advise gurus.[/quote]

While you await the gurus attention, let the Novice have a go.

First off, I was suffering from delusions of honesty and did not follow through on buying property because of the black and white hangover. Then reality gave me a dose of wisdom and I did end up altering my morals.

1. 6L
2. Do they care these days when you withdraw a few lakhs ?
3. Is it repatriable in the first instance once you withdraw from the NRE account ? We have to wait for someone knowledgeable to weigh in on this.
4. That's where you can take advantage of the colors.
5. Yes, there is no escaping it though in areas where the registration value closely corresponds to the market value, the share of black money has decreased.

[nitin_verma1]

thanks novice. Am sure somobody gone thru this stuff before and guide us in right direction.

[bengal_tiger]

Tell them point blank that you will only pay with white funds. You can tell them that you don't have any black money and could be subject to an audit in case you have to explain what happened to the money you withdrew. The fact that 2 locations don't want the money in black can be used to convince the other sellers to tow your line, after all, they too have to sell.

If you keep your accounts clean, you will have fewer problems in the future.

[MadMax]

Hi Guys,

Am looking few properties in India and as we know the concept..almost everybody is asking some percentage of money By Cheque(White money or number 1) and rest of the money by Cash(Number 2 or Black money.)

Let suppose am buying plot for 12 Lac.
Guy is asking 50% (6 lac.)white money and rest 50% black money(6 lac.)

Now here are my questions
1) When i go for plot registration, what amount i can specify ???
6 Lac? 12 Lac. ? or some other amount ?

2) How can i account for 6 Lac. cash amount... as am withdrawing money from my NRE account ?

3) Let suppose, i register the plot for 6 Lac. and later on sold in 20 Lac.
How much money will be repatriable ??

4) If i sold the plot in 20 Lac....do i need to pay capital gain tax on 14 Lac.(b'coz plot is only registered on 6 lac. ) or i pay tax on 8 Lac. (as i paid 12 lac. in total for the plot.)???

5) Is anybody doing transaction like this before? Any other ideas how to deal with this kind of situations. I know, we NRIs want to do good to india and i wanna register the plot on total price(12 lakh)..but its hard to change whole corrupt system. Till today i looked at almost 50 prime location plots and around 48 want the payment in White plus Black.

Please advise gurus.[/quote]

1. 6 Lac
2. There is no accounting. It becomes black. Nobody will ask you what you did with it.
3. 6 Lac according to old law. I think there is a new law which allows people to repatriate around 100k USD(or is it a million?) every year.
4. 14 lac(if the buyer registers it at 20lac).
5. You have to bite the bullet and make a decision. People look at you like you are out of your mind when you say you want an all white transaction. It will be very hard to find a all white deal on properties that you like. But, some people say they have found them.

[Desi_by_Nature]

If i sold the plot in 20 Lac....do i need to pay capital gain tax on 14 Lac.(b'coz plot is only registered on 6 lac. ) or i pay tax on 8 Lac. (as i paid 12 lac. in total for the plot.)???

When you put it up for sale for 20 lacs be prepared to accept 10 lacs white and 10 lacs black. After all the guy who buys your plot needs too offload his black money somewhere too.
And therefore you will pay capital gain on 4 lacs only. :emsmilep:

[DosaiLvr]

A few threads have discussed this topic in detail.

I suggest you to search the FVTs and do an advanced search using keywords 'Capital, gain, black, white' etc and combinations there of.

[babu_babu]

1) When i go for plot registration, what amount i can specify ???
6 Lac? 12 Lac. ? or some other amount ?
>>Why not register for 1C. so that you don't have to pay any capital tax!
Hint: Registrar office has guide line value. They will only register for that amount. There are cases, where 10L property was registered for 10C to get the bank loan of 5C!
There are also cases, where 10C property was registered for 10L to get the less registration charges.

2) How can i account for 6 Lac. cash amount... as am withdrawing money from my NRE account ?
>>You don't have to bother about the cash withdrawal, other than cash theft or robbery while transporting the cash.

3) Let suppose, i register the plot for 6 Lac. and later on sold in 20 Lac.
How much money will be repatriable ??
>>20-6=14L-CG tax, where 6L is white cash payment
20-12=14L-CG tax, where 12L is white cash payment
What is the conclusion?
Registration amount is not related, but agreement and method of payment are important.

4) If i sold the plot in 20 Lac....do i need to pay capital gain tax on 14 Lac.(b'coz plot is only registered on 6 lac. ) or i pay tax on 8 Lac. (as i paid 12 lac. in total for the plot.)???
>>CG taxable income = 20-white cash-Reg exp

5) Is anybody doing transaction like this before? Any other ideas how to deal with this kind of situations. I know, we NRIs want to do good to india and i wanna register the plot on total price(12 lakh)..but its hard to change whole corrupt system. Till today i looked at almost 50 prime location plots and around 48 want the payment in White plus Black.
>>Follow the same seller method, when you become seller.

[nitin_verma1]

1) When i go for plot registration, what amount i can specify ???
6 Lac? 12 Lac. ? or some other amount ?
>>Why not register for 1C. so that you don't have to pay any capital tax!
Hint: Registrar office has guide line value. They will only register for that amount. There are cases, where 10L property was registered for 10C to get the bank loan of 5C!
There are also cases, where 10C property was registered for 10L to get the less registration charges.

So it means... its up to registar office as per guidelines. If they allow me to do registration of 12 lac....i can go for it.

2) How can i account for 6 Lac. cash amount... as am withdrawing money from my NRE account ?
>>You don't have to bother about the cash withdrawal, other than cash theft or robbery while transporting the cash.


3) Let suppose, i register the plot for 6 Lac. and later on sold in 20 Lac.
How much money will be repatriable ??
>>20-6=14L-CG tax, where 6L is white cash payment
20-12=8L-CG tax, where 12L is white cash payment
What is the conclusion?
Registration amount is not related, but agreement and method of payment are important.
Means when i sold the plot, whatever money am receiving as White Cash Payment is repatriable ?? What kind of agreement and method of payment we are talking abt ??

4) If i sold the plot in 20 Lac....do i need to pay capital gain tax on 14 Lac.(b'coz plot is only registered on 6 lac. ) or i pay tax on 8 Lac. (as i paid 12 lac. in total for the plot.)???
>>CG taxable income = 20-white cash-Reg exp
If White Cash Recived is 12L then CG tax = 20 -12- Reg exp = 8 Lac.(approx)

Now my question is if am only receving 12L as white cash payment during selling...how can i show that i sold the plot in 20 Lac and gain 8 Lac. as capital ??? Am i missing something here ?

5) Is anybody doing transaction like this before? Any other ideas how to deal with this kind of situations. I know, we NRIs want to do good to india and i wanna register the plot on total price(12 lakh)..but its hard to change whole corrupt system. Till today i looked at almost 50 prime location plots and around 48 want the payment in White plus Black.
>>Follow the same seller method, when you become seller.

[babu_babu]

1) When i go for plot registration, what amount i can specify ???
6 Lac? 12 Lac. ? or some other amount ?
>>Why not register for 1C. so that you don't have to pay any capital tax!
Hint: Registrar office has guide line value. They will only register for that amount. There are cases, where 10L property was registered for 10C to get the bank loan of 5C!
There are also cases, where 10C property was registered for 10L to get the less registration charges.

So it means... its up to registar office as per guidelines. If they allow me to do registration of 12 lac....i can go for it.

Yes.


3) Let suppose, i register the plot for 6 Lac. and later on sold in 20 Lac.
How much money will be repatriable ??
>>20-6=14L-CG tax, where 6L is white cash payment
20-12=8L-CG tax, where 12L is white cash payment
What is the conclusion?
Registration amount is not related, but agreement and method of payment are important.
Means when i sold the plot, whatever money am receiving as White Cash Payment is repatriable ?? What kind of agreement and method of payment we are talking abt ??

Yes.
White cash means, solid proof of cash transaction (cheque/sale agreement signed by seller and buyer). Any proof that binds the both seller and buyer.
Typically signature on white paper similar to signed cash receipt OR payment plan with dates on a white paper signed by both.
In general, the sale agreement will have a place for payment plan.


4) If i sold the plot in 20 Lac....do i need to pay capital gain tax on 14 Lac.(b'coz plot is only registered on 6 lac. ) or i pay tax on 8 Lac. (as i paid 12 lac. in total for the plot.)???
>>CG taxable income = 20-white cash-Reg exp
If White Cash Recived is 12L then CG tax = 20 -12- Reg exp = 8 Lac.(approx)

Now my question is if am only receving 12L as white cash payment during selling...how can i show that i sold the plot in 20 Lac and gain 8 Lac. as capital ??? Am i missing something here ?




1)You will have to declare 12L only to IT people.
2)If you declare that you sold for 20L, then IT people would catch hold of the buyer. He would say that he only paid 12L and file a case against you for defaming him (to escape from the IT people)