Calculation of Consideration of immovable property under section 56(2)(x)

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This discussion clarifies the calculation of consideration for immovable property under Section 56(2)(x) of the Income Tax Act. It addresses whether expenses like stamp duty, registrar fees, taxes, lease rent, and transfer charges can be included when determining the property's value for tax purposes. The general advice is that purchase costs are capitalised, while sale costs may be deductible.

k M Goyal

k M Goyal (Querist)
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05 September 2025 Dear Sir,
Income from other sources under section 56(2)(x):
the following income Under Section 56(2)(x) shall be chargeable to income-tax under the head "Income from other sources”:
persons on or after the 1st day of April, 2017,—
(a) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum;
(b) any immovable property,—
(A) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property;
(B) for a consideration, the stamp duty value of such property as exceeds such consideration, if the amount of such excess is more than the higher of the following amounts, namely:—
(i) the amount of fifty thousand rupees; and
(ii) the amount equal to 70[ten] per cent of the conside-ration:
Provided also that where the stamp duty value of immovable property is disputed by the assessee on grounds mentioned in sub-section (2) of section 50C, the Assessing Officer may refer the valuation of such property to a Valuation Officer, and the provisions of section 50C and sub-section (15) of section 155 shall, as far as may be, apply in relation to the stamp duty value of such property for the purpose of this sub-clause as they apply for valuation of capital asset under those sections:

Sir

My Query:
In calculation of Consideration of immovable property for Income from other sources under section 56(2)(x) can stamp duty, registrar fees, Taxes paid as GST/VAT, one time lease rent, Transfer charges paid to Authority can be included or not?
Please guide me.
Regards
K M Goyal

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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05 September 2025 The charges paid while purchase are generally capitalized. While same at the time of sale are deductible under charges paid for transfer/sale of the property.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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20 September 2025 Good Luck..

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