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Property Purchased on Auction

vinod kahar (17 Points)

29 July 2021  
I have purchased the residential property on auction in FY 2014-15 at bid price which is less than stamp duty value of property on the date of registration.At the same the difference between stamp duty value and purchased price is more than 50k.

Today i have received the notice from department u/s 148 saying i have escaped the income tax for the said transaction.

Do i need to pay tax on property purchased less than stamp duty value when property itself is purchased on fair market value through auction?

 6 Replies

Mahesh Shah (584 Points)
Replied 29 July 2021

In my opinion & as I understand the income tax act ...I can say is only 10 percent variation from municipal value of property is allowed from financial year 2019 / 20.
if auction price is less by 10 percent compared with municipal price, then tax has to be paid as per municipal value
still requested to reconfirm from professional
1 Like

Harsh Khemchandani (116 Points)
Replied 29 July 2021

How much amount is escaped

Mahesh Shah (584 Points)
Replied 29 July 2021

Previously it was 2 percent or 5 percentage....so u might have got notice to pay tax on difference with int.

Hari Beldona (ACA) (1517 Points)
Replied 29 July 2021

Write a letter to the Assessing Officer who has sent notice u/s 148 by stating that the property in question is not undervalued but purchased in auction and self attested copy of the bank letter that property purchased by you

Nidhi (Chief Accountant) (2060 Points)
Replied 31 July 2021

Write a letter to the Assessing Officer for drop of proceddeing with proper explanation

Sourav (Student) (23865 Points)
Replied 31 July 2021

Send a letter to assessing officer

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