With effect from A.Y. 2003-2004 section 50C has been inserted in the Income Tax Act, 1961 dealing specifically about gross consideration in computation of capital gains in respect of transactions in land or building or both.
Section 50C provides that if the value stated in the instrument of transfer is less than the valuation adopted, assessed or assessable by the stamp duty authorities, the valuation as adopted, assessed or assessable by the stamp duty authorities will be considered for the purpose of computation of capital gains arising on transfer of land or building or both. For example if in the agreement for sale, the value of the flat is stated at Rs. 24 lakhs but according to the stamp duty authorities the valuation of the flat is Rs. 34 lakhs, then it will be considered that the flat has been sold for Rs. 34 lakhs and capital gains will be computed on the basis of Rs. 34 lakhs.
Abhishek Ranjan Singh ARS Solutions www.arssolutions.co.in +919022838615 Disclaimer - Before making any decisions do consult the experts. We do not take any responsibility for misrepresentation or interpretation of act or rules. Neither we nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on.
CAclubindia
