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Since 1st March, 1999
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Q & A

I have found a flat ready to be bought. The seller has asked for 10 per cent of the value of the flat in cash, which he wants me to pay as booking amount. Obviously, he is not going to show that money when he files his tax returns.

Will there be any problem if I book it now and take possession after a few months?

What documents should I ask for from the seller?

T. Bhowmik, Rajarhat

Many small-time promoters ask for cash as initial down payment. But the money needs to be shown as a component of the total sale. If that is done, you can agree to what he is asking for.

Ask for a receipt with a revenue stamp duly signed against the cash payment.

Generally, a promoter lets a buyer check all relevant flat documents after the initial down payment. Go through them. Hire a lawyer and take his advice.

Focus on whether the land was properly obtained, bought, or whether it is a joint development.

You need to know if it has a clear title, whether the municipal authority has cleared the plan and if all taxes had been paid.

I work in a private company in Ahmedabad and my yearly income is about Rs 2 lakh.

Six years ago, I bought a house in Ahmedabad for Rs 5 lakh. I have now sold the house for Rs 11 lakh and want to leave Ahmedabad for personal reasons.

What should I do to avoid paying capital gains tax? Should I invest the money in instruments like mutual funds or buy land in my native place, Kerala? Please advise.

Umesh K. Raghavan

If a person sells a ready property, he or she has to invest the money within a year of sale to avoid paying capital gains tax. If it is an under-construction property, the limit is 3 years.

If you buy land, the property needs to be developed within three years.

Investing in mutual funds will not help you save on tax, but you can invest in capital gains bonds.

I have a house in my name and want to reverse mortgage it. Whom should I approach?

A.K. Ghosh, Calcutta

A number of public sector banks like Uco Bank and Union Bank now offer products under the reverse mortgage scheme, essentially a loan against a home that the owner does not have to repay as long as he or she lives there. You should get in touch with these banks.

Send your queries to or mail them to

Sambit Saha, Business Telegraph, ABP Ltd,
6, Prafulla Sarkar Street, Calcutta — 700001

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