Sale of house property

As agreement is of Rs. 20 lakh and you received 20 lakh through Bank, than as per Income tax, Capital Gain also required to be calculated on 20 lakh or Stamp duty value of flat, whichever is higher. (Ignore that 18 lakh, for tax purposes keep in mind only that you sold flat for 20 lakh and received 20 lakh)

Remaining 18 lakh received in Cash is considered as unaccounted money ( in Lyman language, black money). You can not directly deposite this money in your Bank account, otherwise it's create problem in future from IT department.

Okay. can this 38 lakhs be used to repay another housing loan? and say out of 38 lakhs , if buyer took 34 lakhs loan and paid 20 lakhs through bank to seller and 18 lakhs through cash. would there be any problem for the buyer for IT purpose?

Agreement is of Rs. 20 lakh So, this transaction/sale is treated as of Rs. 20 lakh Only, not of 38 lakh...
So,You can receive only 20 lakh from Buyer, and that to in cheque only..as per law...

Rs. 18 lakh not disclose any where

But the buyer is not taking housing loan for 20 lakhs but he is taking 34 lakhs and paying only 20 lakhs for house legally...for that remaining 14 lakhs wouldnt there be any problem for buyer?

Buyer is taking loan from whom ?
bacause Bank will not give Loan of Rs. 34 lakh, when agreement value is of Rs. 20 lakh.