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Unusual situation - need help!

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Unusual situation - need help!

Last updated: September 25 2011
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  • Unusual situation - need help!

    One of my good NRI friend, gave a check of 25L to the developer as an investment on the property he was building. Promised good return in cash and kind... Now the developer says his project is doomed and its difficulty for him to return the investment in cheque. He can only pay cash over a period of time.

    The situation - The developer is paying this amount in cash. If my friend deposits this cash in bank, can he get into IT (Income- Tax) trouble in India. OR there won't be issue as he has 25L entry going out???

    I do not know the answer... If any one can advise that would be great!
    Pl. help
  • #2

    #2

    Re : Unusual situation - need help!

    who is that developer ??
    new members will think b4 taking any decision

    Comment

    • #3

      #3

      Re : Unusual situation - need help!

      Originally posted by dhinchek View Post
      ...

      The situation - The developer is paying this amount in cash. If my friend deposits this cash in bank, can he get into IT (Income- Tax) trouble in India. OR there won't be issue as he has 25L entry going out???
      He will most likely be in IT trouble if he takes cash. 25L going out by check has to be matched by 25L coming in by check, not cash. That is money laundering.

      Not many people know, but all banks are legally bound to report any cash transaction in access of 10L per fin. year from individual's bank accounts/related accounts with same PAN / other govt ID number. They report this data every quarter without fail.

      One option would be to take the cash money (ONLY after assuming there is no other option - by all means try to get check/DD only) and distribute it among his friends or relatives, ask them to deposit 2-3 lacs cash in their respective accounts and give him check - that is if they don't mind and pray they don't get in trouble! Hope this helps.

      That said, get in touch with a good CA/Financial adviser. They should be able to give you sound advise. Either ways, he is in a spot.

      After things are sorted out, don't hesitate to name the builder on this forum. We all need to know it - will help others.

      Comment

      • #4

        #4

        Re : Unusual situation - need help!

        Tell u r friend to take 25L first from the builder...put 10L in bank and buy 15L gold...exit 10L gold next year and put it in bank..so on and so forth
        SIMPLE

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        • #5

          #5

          Re : Unusual situation - need help!

          Project doomed but he has cash ???

          Understand the developer's intension ; As cheque would become important evidence and also bounce cheque will attract legal action....
          To avoid this innocent devloper is giving empty commitements ...cash payment.....so there would not be any fix timeline for returning money......

          As time goes on he may use other tactics...be careful

          This is lesson for others......check ugly side of multibager/beger deals.

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          • #6

            #6

            Re : Unusual situation - need help!

            First of all, don't invest where you don't know developer well.
            Also, the 25L is outgoing amount. Against what it will be shown as ??
            Taking back 25L is like making white to black for now reason.
            I suggest, ask builder to buy some property in your name in some other project using this cash + some white. Sell off this property & recover your money.
            If you are happy, you are successful.

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            • #7

              #7

              Re : Unusual situation - need help!

              who is the builder? Please disclose the name..

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              • #8

                #8

                Re : Unusual situation - need help!

                others have given reasons not to accept the cash. however, if your friend decides to accept the cash, no matter how much he accepts, ask him to verify each and every note. there's counterfeit floating around.

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                • #9

                  #9

                  Re : Unusual situation - need help!

                  I remember when I was abroad I was approached by one of my friends who wanted me to invest few Lakh rupees in a builder's scheme where he was giving a plot with buy back guarantee of something like 18 % per year assured. He really pushed me a lot but I declined since I questioned about the assured thing. I knew that the builder would have been in deep trouble to offer such a scheme and it meant putting your money in a high risk investment. Even if the builder is signing an agreement you will lose your money if the builder goes bankrupt. After all he is not a nationalized bank which Government will protect. I remember he took loan to invest money into this scheme. I haven't heard back from him since to tell me what a fool I was not to invest.

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                  • #10

                    #10

                    Re : Unusual situation - need help!

                    Lalach buri bala hai.

                    Comment

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