Introduction
When purchasing property, it is essential to document financial transactions carefully to ensure clarity and prevent future disputes. This article discusses why it is crucial to issue a separate receipt for monetary transactions during the property buying process and the common practices associated with it.
- Monetary Transactions: Whenever you purchase property, money is transferred
either in cash or through bank transactions. It is important to document these
transactions properly. - Receipt in Sale Deed: Typically, a sale deed includes a clause acknowledging the
receipt of the sale amount. For instance, the clause might state, “Received Rupees X
lakhs on this date,” serving as a receipt for the transaction. This is a common practice. - Omission of Actual Transaction Amount: Often, the actual amount paid in the
transaction is not fully reflected in the sale deed receipt clause. Instead, the amount
mentioned may be based on the government’s guide value or market value, which
could be lower than the actual transaction amount. - Discrepancy Example: For instance, if the guide value for the property is listed as
Rupees 6 lakhs in the sale deed, but the actual transaction amount is Rupees 10 lakhs,
the remaining amount of Rupees 4 lakhs is often not documented in writing. This can
lead to issues as the full transaction amount is not officially recorded. - Online Transfers: While online transfers provide proof of transaction, they do not
specify that the amount was part of the property sale. Therefore, they may not serve as
valid evidence in case of future disputes. - Absence of Documentation: Without a separate receipt for the additional amount,
you may face challenges in the future regarding financial transactions, tax issues, or
disputes with the seller. A separate receipt ensures you have a clear record of the
entire transaction. - Need for Separate Receipt: To address this, it is essential to issue a separate
receipt for any additional amount over the guide value stated in the sale deed. This
receipt should explicitly mention the amount and serve as proof of the entire financial
transaction. - Lack of Common Practice: Currently, many document writers and lawyers do not
routinely issue separate receipts for financial transactions during property sales.
However, this practice is common for power of attorney transactions, where separate
receipts are provided if money is transferred. - Recommendation: Just as separate receipts are issued for power of attorney
transactions, a similar practice should be followed for property sales. Ensure that the separate receipt deducts the guide value mentioned in the sale deed from the total transaction amount. - Handling Prepaid Amounts: Sometimes, part of the transaction amount might be
paid in advance or in installments before the actual sale deed is executed. It is
essential to document these details separately in the receipt to avoid future
complications. - Future Disputes: A well-documented receipt helps prevent issues related to
monetary transactions and provides clear evidence if disputes arise. Having detailed
records will serve as a safeguard against future financial and legal challenges. - Importance of Clarity: Ensure that all details regarding the financial transactions
are clearly documented in the separate receipt. This will help avoid problems related
to the transaction amount and provide a solid record for future reference.
Conclusion
Issuing a separate receipt for financial transactions during a property purchase is a crucial practice to ensure clarity and prevent future disputes. By documenting the entire transaction amount separately from the sale deed, you safeguard yourself against potential issues and provide clear evidence of the financial dealings involved in the property transaction.
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