I'm seeking advice for a situation that I'm in right now. Please find below situation explained.
I'm in the process of selling my property at "Area A" and wanted the dealing to be all white. Reason: I want to fix my existing home loan on another property at "Area B". I believe there is no Tax on using money from selling property if used to buy/invest on another property/fix home loan.
I made a deal with Mr.X to get my property sold. Mr.X is a builder who renovates old apartments/houses and sells it for a higher price. The deal was for 21.4 Lacs. Mr.X said that he cannot pay a single penny in white. So he said that if I need it all in white then I have to wait for renovations on my property, and then eventually a buyer to buy the same. He also said the entire process will take a maximum of 3 weeks, and gave me 5 Lacs in cash (of course black money) which had to be returned when I get the full settlement, and entered into a 90 day agreement. (Of course I was not ok with 90 days but he said it is only a standard format, and the actual payment will be made within the promised 3 weeks. And so, if he is not able to find a buyer he would buy my property himself with white money, and then work on selling it later. (All these were just words, and nothing in writing. My bad, I was desperate to sell, wasn't thinking much).
Now it has come down to this. I made the deal on May 18th, and finally last week on the 29th of June he got a buyer Mr.Y who is going to buy the renovated property for 28 Lacs. Mr.X said that there will be a first draft agreement with sale price as 28lacs and Mr.Y would pay 10 lacs spread across 4 cheques, and this will be destroyed during registration of property where the sale value of the property would be mentioned as 21.4 lacs. I've deposited the cheques, and they are all in my account now.
Yesterday Mr.X calls me and says that the Final Sale Deed would bear the sale price as 28 Lacs, since that is the actual guide line value, and there is pretty much nothing that he could do about it.
So end of day here is what I will have:- an agreement and my bank account, showing that I had sold my property for 28 Lacs, when in fact only 21.4 lacs is mine. (I will have to withdraw 6.6 Lacs and pay Mr.X.)
I understand that I have to re-invest all of the money obtained by selling property to save tax, else I will have to pay 33.3% tax. So I will end up paying tax close to 2.2 Lacs, but on the other hand Mr.X will happily walk away with the 6.6 Lacs. To top all this I'm going to pay Rs. 43000 as brokerage to a Mr.Z.
I've lost count of how much I have lost so far in this deal.
Can someone tell me:-
How much money have I lost so far? (I can use this as a talking point with Mr.X)
I know I've lost a huge amount in interest rates too if I would have re-invested (NHAI & Electricity bonds) on 21.4 Lacs, but really not sure how much. (or) on home loan EMI Rs.36000/ month at the moment.
I know you could say that I might as well get out of this deal totally, but I'm already neck deep, if I try to come out, here is what I think might happen:- on top of the losses incurred due the 7 weeks wait time, Mr.X could charge me exuberantly for the renovations. (He looks like a bully too)
Please request someone to enlighten me with your thoughts and advice to help me see through this situation. Thanks in advance.