Capital gain

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J.M. Raja (Querist)

06 June 2016 Dear Sir/Mam,

whether the buyer of Agricultural land needs to pay tax under the head income from other sources, for the difference between the value of stamp duty and sale consideration, if he purchased the agricultural land for value, which is less than stamp duty value?

regards
Raja

CA Rohit Jain

CA Rohit Jain (Expert)

06 June 2016 yes .... when buyer buys land or building or land & building at a price less than the value adopted by the stamp authority ... he has to pay tax under the head income from other sources on difference amount. Read section 50C and 56(2) vii for better clarification

Amol S Joglekar

Amol S Joglekar (Expert)

07 June 2016 I beg to diifer.........No tax implication for BUYER.

Rupesh Jain

Rupesh Jain (Expert)

07 June 2016 value diff will taxable in hand of seller not in hand of buyer.

J.M. Raja

J.M. Raja (Querist)

07 June 2016 It's a double taxation. So, Both buyer & seller needs to pay tax on this.
On the part of seller, whatever may be the sale consideration, he should calculate his capital gain with stamp duty value as sale consideration.
On the part of buyer, he needs to pay tax on the difference amount of sale consideration & stamp duty value under income from other sources, if the difference exceeds Rs.50000/-.
Sec 56(2)(vii) clearly states the above.

CS Advocate Abhishek Goyal

CS Advocate Abhishek Goyal (Expert)

08 June 2016 If it is an agricultural land falling outside the area prescribed than provisions of section 56(2)(vii) will not be applicable i.e. there will be no implication for buyer even if there is difference between sale consideration and stamp duty value exceeding Rs. 50000/-.

J.M. Raja

J.M. Raja (Querist)

09 June 2016 Yes sir, agree with CS Abishek sir, i have referred it. Now clear.
Thank you all.

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