Help Needed from Income Tax Experts regarding property purchase

Yes advocate is correct to some extent, correct treatment is as follows:-

seller need to show sales consideration as per section 50C Rs 47.06 lakhs instead of Rs 44 Lakhs and pay tax @ 20.80% on his long term capital gain income.

buyer need to show the difference amount of Rs 3.06 lakhs as income from other source under section 56(2)(vii) and need to pay tax @ 31.2%.

but there is a provision which say that where the value adopted or assessed or assessable by the stamp valuation authority does not exceed one hundred and ten per cent of the consideration received or accruing as a result of the transfer, the consideration so received or accruing as a result of the transfer shall, for the purposes of section 48, be deemed to be the full value of the consideration.

since in your case the difference between stamp valuation and sale consideration is less than 10% thus nothing will be taxable in both the person hand..

note that this 110% comes in existence wef 01.04.2021 prior to this date the rate was 105%..

Thanks @ CA Abhay Gupta Sir. Is it also applicable for residential property? As when I called the advocate the advocate told the provision of 10% is applicable for comercial property and for residential property sale consideration is only 50000.
 

Originally posted by : CA ABHAY GUPTA
	Yes advocate is correct to some extent, correct treatment is as follows:-seller need to show sales consideration as per section 50C Rs 47.06 lakhs instead of Rs 44 Lakhs and pay tax @ 20.80% on his long term capital gain income.buyer need to show the difference amount of Rs 3.06 lakhs as income from other source under section 56(2)(vii) and need to pay tax @ 31.2%.but there is a provision which say that where the value adopted or assessed or assessable by the stamp valuation authority does not exceed one hundred and ten per cent of the consideration received or accruing as a result of the transfer, the consideration so received or accruing as a result of the transfer shall, for the purposes of section 48, be deemed to be the full value of the consideration.since in your case the difference between stamp valuation and sale consideration is less than 10% thus nothing will be taxable in both the person hand..note that this 110% comes in existence wef 01.04.2021 prior to this date the rate was 105%..

Thanks @ CA Abhay Gupta Sir. Is it also applicable for residential property? As when I called the advocate the advocate told the provision of 10% is applicable for comercial property only and for residential property sale consideration is only 50000.
 

Section 50C affects all the transactions of land and buildings in the country except Jammu and Kashmir.. it is applicable to land and building which capital asset for an assessee...means any land and building whether used for residential or commercial but not held as stock in trade..

Originally posted by : CA ABHAY GUPTA
	Section 50C affects all the transactions of land and buildings in the country except Jammu and Kashmir.. it is applicable to land and building which capital asset for an assessee...means any land and building whether used for residential or commercial but not held as stock in trade..

Sir, does that mean since in our case the difference between stamp valuation(47.06 Lakhs) and sale consideration(44 Lakhs) is less than 10% thus nothing will be extra taxable for both buyer and seller even if this a residential property?
 

Originally posted by : Ila Paul
	Originally posted by : CA ABHAY GUPTA Section 50C affects all the transactions of land and buildings in the country except Jammu and Kashmir.. it is applicable to land and building which capital asset for an assessee...means any land and building whether used for residential or commercial but not held as stock in trade.. Sir, does that mean since in our case the difference between stamp valuation(47.06 Lakhs) and sale consideration(44 Lakhs) is less than 10% thus nothing will be extra taxable for both buyer and seller even if this a residential property?

Sir can you please confirm?

Yes... nothing need to be pay