Sec 43CA of income tax applicablity

[Guest]

Dear Sir

I had applied for a site in Bangalore in the year 2006 and paid 60% amount to the builder by way of Demand Draft.

There was an agreement between our Bank Employees Union who is a felicitator between the Builder and me. The builder issued me an allotment/ offer letter in tis effect

The agreed rate was ₹ 560/- per sft. The builder got final permission from BMRDA on Oct 2014 and send me a letter stating that the plot is ready for registration and asked me to pay the balance amount of 40%.

Further the builder is demanding an extra amount of ₹ 190/- per sft stating that the Govt of Karnataka has raised the guidance value as ₹ 750/-.

The builder is stating that since new provisions of Sec 43CA is applicable to him and the IT dept will calculate his income at the guidance value [ i.e stamp value for registration].

Is it correct in his demand.

Whether the sec 43CA [Sub section 1,2,3,4] can give any relief for me since there was an agreement before the increase of guidance value and I paid some amount by way of Demand draft.

Please guide me

Regards

V madhusudhan.

AI Summary

Section 43CA: Real Estate Deals Must Match Guidance Value at Registration, Despite Earlier Agreements A user inquired about the applicability of Section 43CA of the Income Tax Act regarding a real estate transaction in Bangalore. They had agreed to a price of 560 per square foot with a builder in 2006, paying 60% upfront. In 2014, the builder requested the remaining balance and an additional 190 per square foot due to an increased government guidance value. The user questioned the legality of this demand under Section 43CA, given the prior agreement. A respondent clarified that the property value must align with the guidance value at the time of registration, regardless of earlier agreements.