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Income Tax - Section 269SS

Started by SANTHOSH, September 28, 2015, 06:31:12 PM

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As per amendments this year, From 1st June, 2015 if any transaction relating to immovable property, where advance is accepted by the seller in the form of cash then there is a penalty of 100%.

Is there any penalty on buyer for the amount paid by way of cash (Advance and Balance amount)?

Ex: A has sold the land to B for Rs.16,00,000 on 29/09/2015. B paid advance of Rs.4,00,000 on 1/09/2015 and Rs.12,00,000 on 29/09/2015 by way of cash. What are the penalties on Seller and Buyer as per amendment or as per Income Tax Act?

And if consideration is paid by way of Pay order. whether Pay order is considered as Account payee draft or not?

sai prasad

in the hands of a buyer, it is consideration paid for purchase of property and no consequential action follows.However, he  buys as a stock-in-trade for business provisions of sec.40A(3) are applicable.

Nextly ,advance for  property is convered under the new explanation to sec.269SS,in the hands of the seller. A pay order is a demand draft issued for usage within the town/city and  it complles with the
The full payment received , on the date of sale, is out of sec.269SS . Since the same is registered on that day,it is not advance or otherwise. Advance is amount received before the sale deed and the word ,otherwise,  may include part payment, emd or any such other term  used to indicate the payments to be made before the completion of sale deed.


Thank you Sir for reply.

I require a clarification regarding Pay order.

As you said If we take pay order there is no problem as per Income Tax Act, 1961. What I want to know is whether we have to take care that( in the point of seller) from whom the consideration is received i.e If buyer is B and her spouse A is taken Pay order and given to us but the property is sold to B. Is there any problem in the above transaction as per income tax i.e. In pay order we don't know from whose the amount is receiving? 

Is there any consequences as per Income Tax

sai prasad

this is a more a matter of fact and source . So long as the money emanates from buyer ,from his own sources of her spouse or others,  the same is not relevant in the case of seller . The details  must find place in the sale deed. It is better to keep a copy of  the pay orer