Tax on Diff amount if property purchases less that Govt Stamp Duty Value.

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This discussion explores the tax implications when purchasing residential property for less than the government's stamp duty value. It clarifies that the difference between the purchase price and the stamp duty value may be added to the buyer's income under Section 56(2)(VII), even if the property is treated as stock-in-trade. The advice also touches upon transactions involving relatives and potential capital gains tax under Section 50C, suggesting that while the tax authority might consider the stamp duty value, relief may be sought through an appeal.

Pankaj

Pankaj (Querist)
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16 December 2021 B purchases residential plot from C less than Govt Stamp Duty value ( i.e Purchase Consideration Rs 40 Lakh & Govt Stamp duty Value Rs 50 Lakh )
1) Then as per U/s 56(2) (VII) Diff of Rs 10 Lakh will be added in other income in the hand of B ?
2) If B Show such transaction as stock in trade instated of capital assets , then U/s 56(2) (VII) provision is applicable or not ?

A is father in law of B.
If B Sold same residential plot to A less than Govt Stamp Duty Value( i.e Sale Consideration Rs 40 Lakh & Govt Stamp Duty Value Rs 50 Lakh ).

3) Then as per U/s 56(2) (VII) Diff of Rs 10 Lakh will be added in other income in the hand of A ? can A take benefit u/s 56(2)(X) relative ?

4) Also As per U/s 50C - B has to pay any capital gain ? Because B purchases such plot to Rs 40 Lakh &sold of Rs 40 Lakh but as per u/s 50C Govt Stamp duty value Rs 50 Lakh will be considered as sales consideration .

sir please explain

Pankaj

Pankaj (Querist)
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16 December 2021 Sir please reply . Your reply is valuable

Pankaj

Pankaj (Querist)
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16 December 2021 Sir please reply.
Thanks