capital gain on stamp duty

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Richa Garg (Querist)
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26 June 2011 pls tell me benefit available if stamp duty is paid by the buyer of land?? what will be the effect if it is paid by the seller of the land

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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26 June 2011 I am not an expert in Stamp Duty Act.
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The first benefit is to the Government which charges such Stamp Duty.

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In case of land stamp duty is generally paid by the buyer.

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In case of payment by seller, an agreement is required to be entered into between the 2 parties in which it has to be mentioned that seller will pay the duty. You may refer Section 30 of the Bombay Stamps Act.

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Stamp duty then will be levied on the basis of agreement value or market value whichever is higher.

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The party paying stamp duty gets its benefit in the following manner -

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The buyer gets benefit in case he pays the duty so, by adding it to his cost of acquisition resulting in a lesser amount of capital gains at the time when he will sale the property.
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Whereas the seller gets its benefit when the property is sold at stamp duty valuation taken by the valuation officer.
He can deduct the cost from sales consideration as incidental to the sale of property.

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