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Consideration of Sale of Property whose DLC rate is more and Market rate is less

Tax queries 713 views 1 replies

First of all, Namaskar and Happy Diwali to Respected Learned Members of CAClubIndia Community

Sir, there is a small query -

Suppose, value of a shop calculated on Circle/DLC rate is 50 L but Market rate is 35 L [30% less than Circle/DLC rate]

If the property is sold at Market rate of 35 L and Sale Deed is registered on this consideration amount, then it becomes much less than Circle/DLC rate.

It is heard that to avoid any tax inquiry, consideration amount should at least be equal to Circle/DLC rate.

So, query is - What can be the solution for consideration of sale of property whose Circle/DLC rate is more and Market rate is less?

It is highly appreciated if the Respected Learned Members of CAClubIndia Community can put some light on the matter.

Thanks.

Replies (1)

Hi @ marthy,

You need to buy stamp as per circle rate i.e 50L but you can pursue your transaction for 35L.

As per Sec 50C , your sale value will be considered as 50 L. 

For buyer, diff between circle rate and purchase price is treated as "Income from Other sources". i.e 15 L.


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