Q.1055 Buyer wants to

undervalue - Seller wants to pay

full tax . . .

Question: Good day sir, MY children have migrated to Australia & are Australian citizens for more than five years. I am having a property in india The property was purchased as a PLOT ( just a piece of land in residential area) in year 1985 cost Price of Plot was Rs 20,000 ( Twenty thousand )as on registery . later a house was buit on that land 1n 1986 approximately spending Rs seven lakh .I want to sell this property in year 2018 and migrating to Australia to stay with my children as a Permanent Resident of Australia Due to my growing age. After selling my property i want to remit my entire money to Australia. i am getting offer Price of this house is Rs 110 Lakh Approximately which is normal price of this area , but trend of buyers markeet is only to pay approximately 45 lakh through cheque payment to save stamp duty & unknown reasons to me. I am willing to pay all tax on money i will recive by check or cash applicable & transfer funds . Pls guide me what is right procedure to be followed & what amount will it be as long term capital gain & how it is calculated so i can pay all taxes on cash as well . Do i need to take permission from RBI to transfer funds to Australia. can i transfer money in to my children account in Australia. can I deposit my money in my saving account & transfer money or After becoming non resident indian i shall open NRE account in india & transfer money to Australia. Regards B. SINGH Answer: You have asked for guidance for the right procedure to be followed, the right procedure would be to follow the law which means not undervaluing the property to avoid stamp duty when transferring property to buyer. While the buyer’s may say they want registration for a lesser amount than the real agreed on price to save on stamp duty, the real reason I suspect is that they cannot account for the source of the money and are worried about the authorities questioning them. Unaccounted money is commonly what is referred to as black money! If as the buyer desires you agree to register the sale showing a price of 45 lakh instead of the full 110 lakh, then you will get 65 lakh in the form of cash; money that you will not be able to account for if questioned by the authorities. Furthermore you will not be able to deposit this money in a bank account without attracting the attention of the Indian tax authorities. You will also not be able to legally transfer the cash portion of the sale price abroad.

RBI permission to transfer money

from Australia to India

The funds received from the sale of your property can be transferred from India to Australia without RBI permission provided taxes due have been paid and documentation provided to the bank through which you are going to send the money from. A chartered account can do the documentation for you. However, keep in mind that if sale price is shown as 45 lakh, then you would be able to remit 45 lakh less taxes.

Transferring money to children’s

account in Australia

Since you have asked for my opinion, I would advise all parents planning to go abroad to stay with their children NOT to burn all their bridges. Spend a few months abroad to get firsthand experience of the lifestyle of seniors abroad. I recommend you read an article titled ‘Reality Check - Before moving from India - PARENTS MIGRATING ABROAD’ To read the article use the link: http://nriinformation.com/articles3/parent s.htm Regarding opening NRE account in India, Yes! If you decide to transfer the sale proceeds in an NRE account, you can move the money abroad anytime you wish easily, these days with a click of a mouse!