Purchase of Property for consideration less than Stamp duty Value

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If you purchase a property for less than its Stamp Duty Value (SDV), the difference between the SDV and the purchase price may be taxable as 'income from other sources' under Section 56(2)(x) of the Income Tax Act. This rule generally applies unless the difference is less than £50,000 or the property is received as a gift or inheritance. The discussion also touches upon how to declare this income in your Income Tax Return (ITR).

Himani Sharma

Himani Sharma (Querist)

23 May 2024 I had purchased a property in the name of my father who is senior citizen aged 70 years for Rs15,00,000 and the Stamp duty value(SDV) of that property is 37,50,000, Do we liable to pay tax on difference amount (SDV- Sale consideration) I,e 22,50,000.
Please note property purchased from cousin by mutual understanding for less value

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

23 May 2024 Yes. Additional tax liability arises.

CA Puja Sharma

CA Puja Sharma (Expert)

24 May 2024 According to Section 56(2)(x) of the Income Tax Act, if an immovable property is transferred for a consideration which is less than the stamp duty value, the difference between the stamp duty value and the actual consideration is taxable in the hands of the buyer as "income from other sources"
There are some exceptions to this rule.
For example, if the difference between the stamp duty value and the actual consideration is less than Rs. 50,000, then this provision won't be applicable. if the property is received as a gift or inheritance etc.

Himani Sharma

Himani Sharma (Querist)

24 May 2024 How to calculate such tax and how to show in ITR as there is no option to show this if total income doesn't exceed 50lakhs

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