Larry wants to sell his house. He owns it for free and clearly and does not need the entire purchase price in advance. Derrick is interested in buying the house, but he doesn`t have all of Larry`s selling price and he struggles to get a mortgage. What is a deed of sale and terms and conditions that home buyers must follow. If the agreement between the parties is not registered, the protection of the property or a benefit conferred by Section 53A of the TPA would not be guaranteed by the Articles of Association. The reservation annexed to section 49 of the Indian Registration Act merely postulates that such an agreement could be offered as evidence in a legal action for a particular benefit. For example, a buyer and seller can use this method if the buyer does not have the money to pay in full. If the seller doesn`t need all the money or doesn`t care about letting the buyer reside on the land while they pay for it, they could come up with a purchase agreement to clarify the agreement and protect both parties. The scope of Article 50C has been extended to w.e.f.
A.Y. 2010-11 to the transaction executed by agreement of sale or proxy by inserting the word „assessable“ and the words „the value thus accepted or evaluated“. To explain it in more detail, there have been litigation in the past in cases where the value of the asset varies at the time of the actual sale and sale agreement due to economic factors such as demand and supply. In such cases, taking into account the value accepted by SVA as a counter-performance of the sale would inflict disproportionate harshness on taxpayers by forcing them to pay taxes on something that will never be collected. It is possible to note that the agreement does not result in the transfer of ownership only if the full consideration has not been received. There may be various other conditions that may be imposed on both the buyer and seller to conclude the sale. If the seller agrees to treat all or part of the counter-performance of the sale as a loan to the buyer and no other conditions are to be met, the date of the agreement and registration will be the date of the transfer and other consequences. On April 18, 2008, the Ministry issued a revised bulletin to clarify its position on the taxation of assignments of sales contracts. While the Department still maintains its position that the assignment of a contract of sale is a taxable event, it has softened its position by providing a safe port in which an assignment of a contract of sale is not considered a taxable transaction.