Hi All,
We are in the process of finalizing a property in a BDA approved layout in Doddakallasandra, Kanakapura Road. The seller asked us to pay the guidance/registration value in white (i.e 15 lakhs) and pay the remaining amount (35 lakhs) in black. All the money we have is hard earned white money in our bank accounts. I am concerned about withdrawing and traveling with large sums of cash from bank given the security risks involved. Also I heard that RBI/SEBI has a clause in prevention of money laundering act where any withdrawals crossing 10 lakhs in a month get reported as suspicious transactions.
We have paid an advance of Rs 10,000 to the seller, so it is difficult for us to drop this deal. Could you point out how to go about this deal in a safer manner? Thanks!!
Kind Regards,
Subrahmanya
Black money in buying property
Re: Black money in buying property
This kind of demand from the sellers are very common in real estate transactions. you have very limited options.
1) if you are a salary class person and undergoing TDS, There is no need to worry much about any clauses of RBI as your source of income is transparent and already declared.
2) If your preferred mode of payment is not in cash, ask him to take the balance amount in a separate Cheque or DD's(even in multiple names of his family members or trusted people, which can be en cashed from different accounts at his convenience).
3) if he is very particular about the Balance amount in cash and you are worried about the security risk, ask him to collect the same from you at the bank itself, either before the registration or after the registration. From there, it will be at his risk.
4) lastly You can draw your amount in installments and keep it in safe location( Bank locker) and hand over to him either at your home or at his home or in any other safe location of mutual convenience.
1) if you are a salary class person and undergoing TDS, There is no need to worry much about any clauses of RBI as your source of income is transparent and already declared.
2) If your preferred mode of payment is not in cash, ask him to take the balance amount in a separate Cheque or DD's(even in multiple names of his family members or trusted people, which can be en cashed from different accounts at his convenience).
3) if he is very particular about the Balance amount in cash and you are worried about the security risk, ask him to collect the same from you at the bank itself, either before the registration or after the registration. From there, it will be at his risk.
4) lastly You can draw your amount in installments and keep it in safe location( Bank locker) and hand over to him either at your home or at his home or in any other safe location of mutual convenience.
Re: Black money in buying property
That is too high a percentage of black money that he is demanding. Maximum demand is generally 25%, though you should desist from paying that also to do your bit.
Anyway, practically speaking, there are people who are willing to sell their property completely in white and you have to specifically and firmly tell your broker or agent that you need such sellers only. In fact, I was and is one such seller, who sold the site in white (same value as you are quoting) although the broker insisted/cajoled that there will be few buyers who will pay complete white.
Brokers will certainly work towards your requirement of site without any black money portion as they also need to earn their commission, though they might try very hard to adjust for black money payment as that will ease their work very much.
At the end of the day, it is your conscience and your contribution towards a corruption-less society that matters while taking such decisions.
Regards,
Adarsh
Anyway, practically speaking, there are people who are willing to sell their property completely in white and you have to specifically and firmly tell your broker or agent that you need such sellers only. In fact, I was and is one such seller, who sold the site in white (same value as you are quoting) although the broker insisted/cajoled that there will be few buyers who will pay complete white.
Brokers will certainly work towards your requirement of site without any black money portion as they also need to earn their commission, though they might try very hard to adjust for black money payment as that will ease their work very much.
At the end of the day, it is your conscience and your contribution towards a corruption-less society that matters while taking such decisions.
Regards,
Adarsh
Re: Black money in buying property
I have paid all in white for my real estate transaction even though the builder gave me an option to pay 10% cash which i did not choose. I am sure there will be many such seller who will agree for all white transaction.
Vimal
Vimal
Re: Black money in buying property
If pay lot in black problems
undervalued your property in eyes of government, its Crime
when you sell later for white then u r capital gain is more and so is u r tax
not contributing to govt revenue there in stopping funds for development
undervalued your property in eyes of government, its Crime
when you sell later for white then u r capital gain is more and so is u r tax
not contributing to govt revenue there in stopping funds for development
Re: Black money in buying property
If your only concern is "withdrawing and traveling with large sums of cash from bank", as already suggested - you can ask the buyer to collect it from bank.
Btw, the goons are trying hard to convert blacks to white. I wonder how you gave up to converting you hard earned white money to black so easily. That is a hefty sum of white going into black. Anyway, since you are in the midst of the transaction and done part payment, just go with it as it is wrong time to ponder over. But keep the future transactions (of same deal) bold and wise.
Btw, the goons are trying hard to convert blacks to white. I wonder how you gave up to converting you hard earned white money to black so easily. That is a hefty sum of white going into black. Anyway, since you are in the midst of the transaction and done part payment, just go with it as it is wrong time to ponder over. But keep the future transactions (of same deal) bold and wise.
Re: Black money in buying property
Thanks msn1270. Your response was useful. Especially the second option, which is what I am discussing with the seller.
msn1270 wrote:This kind of demand from the sellers are very common in real estate transactions. you have very limited options.
1) if you are a salary class person and undergoing TDS, There is no need to worry much about any clauses of RBI as your source of income is transparent and already declared.
2) If your preferred mode of payment is not in cash, ask him to take the balance amount in a separate Cheque or DD's(even in multiple names of his family members or trusted people, which can be en cashed from different accounts at his convenience).
3) if he is very particular about the Balance amount in cash and you are worried about the security risk, ask him to collect the same from you at the bank itself, either before the registration or after the registration. From there, it will be at his risk.
4) lastly You can draw your amount in installments and keep it in safe location( Bank locker) and hand over to him either at your home or at his home or in any other safe location of mutual convenience.
Re: Black money in buying property
NEFT transfer is another safer option you can think of.