Section 56(2)(x) V/S section 50C

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This discussion clarifies the application of Section 56(2)(x) concerning property transactions, particularly when the stamp duty value differs from the actual consideration. It explains that Section 56(2)(x) income tax implications may not apply if the difference is within certain limits (Rs. 50,000 or 10% of consideration). The query specifically asks whether the DVO's valuation or the stamp duty value should be considered when calculating income under Section 56(2)(x) in such scenarios.

k M Goyal

k M Goyal (Querist)

09 July 2025 Section 56(2)(x):
the following income Under Section 56(2)(x) shall be chargeable to income-tax under the head "Income from other sources”:
persons on or after the 1st day of April, 2017,—
(a) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum;
(b) any immovable property,—
(A) without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property;
(B) for a consideration, the stamp duty value of such property as exceeds such consideration, if the amount of such excess is more than the higher of the following amounts, namely:—
(i) the amount of fifty thousand rupees; and
(ii) the amount equal to 70[ten] per cent of the conside-ration:
Provided also that where the stamp duty value of immovable property is disputed by the assessee on grounds mentioned in sub-section (2) of section 50C, the Assessing Officer may refer the valuation of such property to a Valuation Officer, and the provisions of section 50C and sub-section (15) of section 155 shall, as far as may be, apply in relation to the stamp duty value of such property for the purpose of this sub-clause as they apply for valuation of capital asset under those sections:
Section 50C(3):
Subject to the provisions contained in sub-section (2), where the value ascertained under sub-section (2) exceeds the value adopted or assessed or assessable by the stamp valuation authority referred to in sub-section (1), the value so adopted or assessed or assessable by such authority shall be taken as the full value of the consideration received or accruing as a result of the transfer.
Means the provisions of Section 56(2)(x) will not apply in case the difference between the Stamp Duty Value and the Actual Consideration is not more than Rs.50,000/- or not more than 10% of Actual Consideration and no income is taxable under section 56(2)(x).
Sir
My Query:
The provisions section 56(2)(x) will apply or not in case the difference between the value ascertained under sub-section 50C(2) by DVO and the Actual Consideration is not more than Rs.50,000/- or not more than 10% of Actual Consideration. Which value to consider (DVO valuation or Actual Consideration)?
For example: Mr. A purchase house from Mr. B on actual consideration of Rs. 10,00,000/- where Stamp Duty Value of property is Rs. 12,00,000/- and the value ascertained under sub-section 50C(2) by DVO of the flat is Rs. 11,00,000/-. value ascertained DVO is not more than 10% of Actual Consideration.
Which value to be consider for income from other sources under section 56(2)(x) either Stamp Duty Value of property is Rs. 12,00,000/- or DVO valuation Rs.11,00,000/- or Actual Consideration Rs,10,00,000/-?
Regards
K M Goyal
Sir
Please provide Concrete opinion.
Regards
K M Goyal