Buying property in India with cash

Buying property in India with cash is possible, but there are legal and financial considerations to keep in mind. Here's what you need to know:

Source of Funds: You must have a legal source for the cash. The Indian government has strict rules to prevent money laundering.
Tax Implications: Any cash transaction above ₹2 lakh in one transaction is prohibited under the Income Tax Act. This applies to both buying and selling property.
Stamp Duty & Registration: The transaction must be registered with the government, and stamp duty + registration fees must be paid via bank transfer or demand draft.
RERA Compliance: Ensure that the property is registered under RERA (Real Estate Regulatory Authority) for transparency and legal safety.

Payment via Bank Transfer: Even if you have cash, it is advisable to deposit it into your bank account and make payments through a bank transfer (cheque, RTGS, NEFT) to comply with legal norms.
Income Tax Scrutiny: Large cash deposits in your bank account can attract scrutiny from the Income Tax Department. Be prepared to provide documentation proving the source of funds.

Legal Risks: The seller may not declare the full transaction, leading to potential future legal troubles.
Demonetization Risks: Future government policies could affect large cash holdings.
Resale Issues: When you sell the property later, undeclared cash transactions can cause problems with valuation and taxation.

✅ Always use bank transactions for transparency.
✅ Take legal advice before making payments.
✅ Ensure full documentation to avoid future disputes.

Would you like guidance on specific locations or types of property in India?