Refund Of Money When Property Deal Is Cancelled
Not every property needs to be dealt with successfully and executed for the proper registration of an agreement. The deal may be stopped from the execution during the payment or maybe after the payment done. The deal can be canceled by the seller or buyer for any reason.
During the purchase of the properties in real estate, the buyers' deposits some amount as token money or some of the buyers deposit the money on the conditions of agreed coupons. The amount of the token money varies like sometimes on the substantial percentage of the property. Property in Kolkata is referred to as the best deal done with all kinds of properties and it will be a loss if some buyers do not sign the deal or purchase the property in real estate.
There are intimation of financial except buyers can have the right to file the case on the specific based of performance according to the court of law.
Use of the token money when the property deal is canceled-
If the buyers cancel the deal with the property, the seller can take the token money as a penalty. In this case of compensation of money, the buyer cannot ask for the tax benefit because the loss of seller considered as capital loss under the tax laws. This can be the profit for the sellers by forfeiting the token money. This money comes under the title of ‘income from other sources’ but not under ‘capital gains’ even though the money is referred to as the capital asset.
Before the amendment of the law in 2014, the compensation amount of money was deducted from the cost of acquisition with respect to the amount received.
Refund of stamp duty:
The buyers have to pay a certain amount of stamp duty for the transactions made to buy any property. This will be adjusted with percentages of property value. For the registration agreement, the buyers have to pay the registration charges also. The government has set the values on stamp duty rates and registration charge which has to be charged. The rules for the refund the amount of stamp duty and registration rates differs from state to state to pay for property transaction.
In Maharashtra, the refund of stamp duty can be claimed within six months from its payment. The government deducts 1% of the stamp duty up to a minimum of Rs.100 of the stamp duty paid. The Maharashtra government allows a long period of 2years to claim the refund of stamp duty in the case of registered agreements where there is a situation of cancellation of the deal of a property deeds has a point that if the developer fails to provide the possession on time of a booked property then only the refund is allowed. The buyers can avail of the amount for refund of stamp duty around 98% if the application is made for a refund. People have the attach registered documents of original agreement and original cancellation deed to claim for the refund. Though people do not get the registration charges.
The refund of goods and services tax-
The developer impose a GST on the agreement value to a certain rate while booking an under-construction property. The rate of the property depends on the category of "affordable housing" or not and whether the developer avails the conditions of GST or not. If the buyer wants to cancel the booking surrendering the right over the under-construction property the developer needs to refund the amount of booking along with the amount of installments paid by the buyer which depends on the demand and supply at the time particularly. Though the GST has been collected by the developer from the buyers, he may not to refund it as he has deposited that amount of GST under the credit of the government. The builder will not refund the amount of GST as he has given service for a long time.
If people want to transfer the rights over the under-construction property to a third party by confirming that with the developer, the selling price includes the rates of GST will not be cover the charges of GST separately on such transaction. While calculating the profit of capital gain, the already paid GST will be referred to as the part of acquisition cost. The capital gains are taxable for the long term of three years or if the people can realize it as profit, the taxable is also referred to as short time capital gains.