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Purchase consideration to compute capital gain

Tax queries 370 views 1 replies

Hi,

Need guidance on below Case:

1. Mr X purchased a commercial property in 2011 @ 15Lacs while the Stamp duty value was Rs. 30 Lac. Later in 2023 this property was sold at 51 Lac with Stamp duty value of Rs 55 Lac. As per Section 50C, in such cases, SDV is treated as Sales consideration for the purpose of computing Capital Gain in the hands of seller. At the same time as per section 56 (2)(x), difference between sale consideration and SDV is taxed under 'Other income' in case difference is more than 10% between the two. Since the property was purchased before 2017 when section 56 (2) (x) was introduced, so my query is that in this case, what will be the purchase consideration i.e 15Lacs or 30 Lacs (subject to indexation) if SDV of 55 Lacs will be treated as sales consideration. Also would be helpful if necessary reference can be shared which upholds the views shared.

Thanks

 

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