Section 50C Applicable?

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This query is : Resolved

Aditya Maheshwari (Querist)

17 August 2010 There is a plot of land being purchased by a person ('the purchaser'). The stamp duty valution of the plot of land is Rs. 1 crore.

The purchaser is getting the plot for Rs. 50 lakhs because of the following reasons:
1. The plot of land is encroached upon by slums.
2. Part of the land is reserved for making municipal garden.

The purchaser will be developing the land to construct a building over the plot of land which can be possible only after the slums are vacated from the land and hence lot of cost will be incurred by the purchaser to finally make it ready for its intended use.

So will Section 50C apply in the above case in the hands of the seller and would capital gains be levied on deemed sale value u/s 50C or the gain would be calculated on actual sale consideration.

Amit Bajaj

Amit Bajaj (Expert)

18 August 2010 If the seller believes that the stamp valuation is excessive then he has the right to object it before the assessing authority.

If its objected the assessing authority may refer the matter to the valuation officer and the matter will be decided according to that valuation report.

If the valuation officer reports lesser valuation then it will be accepted against stamp duty valuation, if he reports valuation more than the stamp duty valuation then the stamp duty valuation will be accepted.

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Aditya Maheshwari

Aditya Maheshwari (Querist)

19 August 2010 Had thought the same. But just wanted to confirm. Thanks.

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