Consideration on sale of property through agreement

Tax queries 269 views 6 replies

A commerical property (shop) was purchased for Rs. 50,000.00 through agreement in 1985-1986. The said property was sold in 2016-17 for Rs. 5,00,000.00 through agreement. How the income from it will be calculated and under which head it will be assessed? Please advise.

Replies (6)

Under capital Gains............ long term capital gains to be assessed after indexation of purchase price......

Sir, does it matter that property was not registered nor at the time of sale or purchase? Do we need to consider the FMV or the value as per the agreement only?

For computing of capital gains tax arising from sale of land and/ or building the consideration if the agreement or the valuation adopted by the stamp duty authority whichever is higher is taken as full value of consideration. It does not matter whether the property is registered or not

Practically, the purchase value will be accepted because of possesion of the shop in your hand for almost 30 years.

But the sell will not be complete without registration (because registration mandatory as per the transfer of property act). And hence the sell value will be considered as per circle rate, and not as per agreement value.

Sir, but there was no registry neither at the time of purchase nor at sale. As for treating sale, registry is necesary,  a view is there that do we consider it in income or not? Should we consider the circle rate (higher than the agreement) ourselves or discharge the liablity on agreement amount? Please guide.

Transfer of any property is not complete in eye of law unless it is registered with registrar with due stamp duty paid......

For taxation part it is transfer of capital assets.......... so the gain will be capital gain and not just revenue/ income.....

In all the cases....... IT department will take circle rate for gains calculation...... so, better discharge duty as per circle rate....


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