Section 50C Valuation for Sale of Residential House Property

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This query is : Resolved

Rahul (Querist)

24 November 2019 Dear Sir,

Kindly guide me through this issue.

Seller has sold house with land ( Residential house property) in the year 2015. Details are as follows,

Sale Consideration - Rs. 4,00,000/- ( this is the sole consideration received - Rs. 3lakhs from bank & Rs. 1lakh cash)

Actual Stamp Duty value for the same is Rs. 3,50,000/-

But due to some wrong legal consultation, the consultant has made the seller pay stamp duty on some so called ' Fair market value' which is very high as compared to sale consideration. Fair market value taken is Rs. 12,00,000.

Hence, Stamp Duty is paid on Rs. 12,00,000 and not on 4,00,000/-.

So, seller has received a notice from Income tax to discharge Long term capital gains on Rs. 12,00,000/- apparently from the blunder in the sale deed.

So, what best can be advised to the seller to avoid paying difference of ltcg@20% on Rs. 8,00,000/-. (i.e, 12-4).

As per my understanding for the financial year 2015-16,

Sec. 50C says,

1. Adopt stamp duty valuation that is minimum stamp duty value as per sub registrar - in case stamp duty is more than sale consideration.

2. Adopt stamp duty or actual consideration (whichever is higher)

3. But in the above case, since so called fair market value was taken as the base and since stamp duty is discharged on the same,

does the seller need to pay ltcg on Rs. 12lakhs now ?

Please advise me on this....