13 January 2014
I AM PURCHASING A PROPERTY WHOSE VALUATION ACCORDING TO STAMP DUTY IS Rs.100. IF THE TITLE DEED IS FOR Rs.80, THEN CONSIDERATION FOR CAPITAL GAINS WILL BE Rs.100.
NOW , QUERY IS IF THE TITLE DEED IS FOR Rs.80, THEN WHAT IS THE CONSEQUENCE FOR ME AS A PURCHASER.?
AS SELLER IS CHARGED CAPITAL GAINS CONSIDERING CONSIDERATION AS 100, CAN I TAKE MY COST OF ACQUISITION AS 100 EVEN THOUGH TITLE DEED IS FOR 100 ??
25 July 2025
Great question — this is a common issue in property transactions.
Here’s the key point:
* **For Capital Gains Tax purposes**, the **consideration value is the higher of the actual sale deed value (Rs. 80) or the stamp duty valuation (Rs. 100).** * So, the **seller’s capital gains will be calculated on Rs. 100**, as per the stamp duty valuation. * For the **buyer**, your cost of acquisition for capital gains calculation will also be considered as Rs. 100 (the higher value), **even if the title deed shows Rs. 80.**
### Consequences for the Buyer:
1. **Higher cost of acquisition (Rs. 100) means when you sell the property later, your capital gains will be computed on this Rs. 100, which could reduce your capital gains liability.** So, that’s beneficial. 2. However, your **title deed reflects Rs. 80**, which is the actual transaction value. This discrepancy might raise a question if the Income Tax Department scrutinizes the transaction. 3. It is generally advisable to align the **sale deed value and stamp duty valuation** to avoid complications, but legally the higher value is considered for capital gains.
### Summary:
* You can **take the acquisition cost as Rs. 100 for capital gains**. * Make sure you pay stamp duty on Rs. 100 as per valuation. * The title deed being at Rs. 80 is not the value used for capital gains purposes, so it won't restrict your cost basis.
If you want, I can help you draft or review related documentation to support this in your records. Would that help?
CAclubindia
