Tax on purchase of plot
This query is : Resolved
02 May 2016
If valuation of property Rs. 35 lacs but actual sale deed executed lower than valuation of property i.e Rs. 15 Lacs.
Kindly explain tax implication on above situation.
Valuation Rs. 35 lacs and sale deed Rs. 15 = Rs. 20 lacs ? What is tax implication ?
Kindly explain tax implication on above situation.
Valuation Rs. 35 lacs and sale deed Rs. 15 = Rs. 20 lacs ? What is tax implication ?
02 May 2016
The above transaction referred by you falls under section 56(2)(vii). Rs. 20 lakhs is liable for taxation as 'income from other sources'.
CA R SEETHARAMAN
(Expert)
02 May 2016
Here the provisions of 50C also applicable Rs 20 lacs will be included for capital gain working of the seller.
02 May 2016
Tax will be calculate on 35 Lakhs.
With effect from A.Y. 2003-2004 section 50C has been inserted in the Income Tax Act, 1961 dealing specifically about gross consideration in computation of capital gains in respect of transactions in land or building or both.
Section 50C provides that if the value stated in the instrument of transfer is less than the valuation adopted, assessed or assessable by the stamp duty authorities, the valuation as adopted, assessed or assessable by the stamp duty authorities will be considered for the purpose of computation of capital gains arising on transfer of land or building or both. For example if in the agreement for sale, the value of the flat is stated at Rs. 24 lakhs but according to the stamp duty authorities the valuation of the flat is Rs. 34 lakhs, then it will be considered that the flat has been sold for Rs. 34 lakhs and capital gains will be computed on the basis of Rs. 34 lakhs.
Abhishek Ranjan Singh
ARS Solutions
www.arssolutions.co.in
+919022838615
Disclaimer - Before making any decisions do consult the experts. We do not take any responsibility for misrepresentation or interpretation of act or rules. Neither we nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on.
With effect from A.Y. 2003-2004 section 50C has been inserted in the Income Tax Act, 1961 dealing specifically about gross consideration in computation of capital gains in respect of transactions in land or building or both.
Section 50C provides that if the value stated in the instrument of transfer is less than the valuation adopted, assessed or assessable by the stamp duty authorities, the valuation as adopted, assessed or assessable by the stamp duty authorities will be considered for the purpose of computation of capital gains arising on transfer of land or building or both. For example if in the agreement for sale, the value of the flat is stated at Rs. 24 lakhs but according to the stamp duty authorities the valuation of the flat is Rs. 34 lakhs, then it will be considered that the flat has been sold for Rs. 34 lakhs and capital gains will be computed on the basis of Rs. 34 lakhs.
Abhishek Ranjan Singh
ARS Solutions
www.arssolutions.co.in
+919022838615
Disclaimer - Before making any decisions do consult the experts. We do not take any responsibility for misrepresentation or interpretation of act or rules. Neither we nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on.
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