Everyone dreams of owning a home. Buying a home is one of the biggest expenses in a person’s life. For this, we save our hard earned money and buy a house or property. The property bought with such dreams sometimes has to be sold due to some reasons. As difficult as buying a home is, selling a home is no easy task. There are many rules and regulations for selling a home.
We cannot take more than Rs.19,999 in cash when signing a contract for a property transaction. For this, in 2015, changes were made in sections 269SS, 269D, 271D and 271E of the Income Tax Act. Of this, the change made in the 269 SS is very important. The government has done this to curb black money. When dealing with cash, it is difficult to ascertain whether the money is legally earned or illegally earned. That is why the central government has imposed some strict restrictions.
Under Section 269 SS, if a person takes Rs.20,000 or more in cash for sale of land (even if it is for agricultural use), house and other immovable property, he is liable to 100% penalty. Under Section 269 SS of the Income Tax Act, if a person takes an amount of Rs.20,000 or more in cash while selling a property, the entire amount has to be paid as compensation. That means whether you withdraw Rs 50,000 or Rs 1 lakh, the entire amount will go to the Income Tax Department as a penalty.
Another important thing to know. Suppose the contract for the transfer of property is canceled due to some reason. If the buyer asks for a refund from the property dealer or seller, the penalty will be charged again. Remittance of Rs.20,000 or more in cash will attract penalty under Section 269SS for the entire amount. However, this Act shall not apply to any specified individual and entity identified by the Government, Government Agency, Banking Institution or the Central Government.
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In property deals up to Rs.19999 can be transacted in cash. It will be credited to your account. Above this amount should be paid by check or electronic transaction (internet banking) only. Registrars generally do not cancel registrations for properties due to cash transactions.
They will carry out the registration process. But the data related to cash transactions will be sent to Income Tax Department. After that you have to deal with the legal issues yourself. So it is very important to carefully handle the provisions of the Income Tax Act while selling the property.
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