Income Tax on Property Sale: If you are also preparing to buy a property or sell any of your property, then it would be better that before that you know all the rules and regulations regarding money transactions… otherwise 100 percent tax on your house Notice will come to Income Tax Department.
Property News: If you are also preparing to buy property or sell any of your property, then it would be better that you know all the rules and regulations regarding money transactions before that. Many times it happens that during a property deal, the opposite party offers cash payment and many times people also agree to such offers.
However, in case of property the entire transaction cannot be done in cash. For this, the government has made some rules, under which a limit for transactions in cash has been fixed.
Difficulty arises when someone crosses this fixed limit. Therefore, today we are going to explain to you some important rules and laws related to cash transactions in property. We will also tell you what problems you may face if you violate these rules.
What is the limit of cash transaction in property deal?
Since the changes made in sections 269SS, 269T, 271D and 271E of the Income Tax Act in the year 2015, you cannot withdraw more than Rs 19,999 in cash. If you cross this limit, you may also receive an income tax notice.
In fact, after any cash transaction, it became difficult to ascertain whether the cash was earned legally or illegally. Therefore the government made such major changes to curb black money.
In this, the change made in 269SS is very important, under which penalty can be imposed in cash transactions. In simple words, if a person takes an amount of Rs 20,000 or more in cash to sell land, house or any immovable property, then he will be charged a penalty of 100%. Even if it is agricultural land.
Now it is important to understand what 100% penalty means. So understand it this way, suppose you sold some of your land for Rs 1 lakh and took the entire payment in cash, then under Section 269SS of the Income Tax Act, all this money will go to the Income Tax Department in the form of penalty or fine.
Section 269T acts as salt on the wound.
You must have heard the saying ‘It hails as soon as you shave your head’, then Section 269T of Income Tax makes this saying true. This is because if for some reason your deal gets canceled and the buyer asks for your payment back and that too in cash, then you will have to pay the penalty once.
That means, here once again under Section 269SS, if an amount of Rs 20,000 or more is returned in cash, then all that money will go to the Income Tax Department as penalty.
How does the Income Tax Department get this information?
Now a question arises that how does the Income Tax Department come to know about this transaction in cash? So the simple answer to this is – Registry of your land, yes, suppose you have done the entire land deal in cash and you have reached for registration, then in such a situation the registrar will not cancel your registry, but your cash Complete information of the transaction will be sent to the Income Tax Department. After this you yourself are wise.
…then how to do the transaction?
As per Income Tax rules, you can do cash transactions only up to Rs 19,999 and this information will also be given in your registry. You can pay the remaining amount through check or internet banking and this will be better for you.
Let us tell you one more thing here that this rule of income tax does not apply to some selected individuals and institutions run by the government, government company, banking company or the central government.
