Query regarding stamp duty.

Query:

I purchase a land & building and bought stamps for the same for stamp duty, but later on duty structure changed and I have sold remaining stamps at 10% discount. What is the accounting treatment of the same loss on sale of stamps.

 

Let take an example:

Value of land:5.00 lacs.

Stamp Duty value; 1.00 lacs.

Revised Stamp duty: 0.60 lacs.

Remaining Stamps sold for Rs. 0.54 lacs.

So what will be the accounting treatment for loss of Rs. 6 thousands.

Whether capitalize to Land a/c.?

Or charge to p/l. a/c.

Replies (1)

If the land is being purchased for re-sale and that is the business of the client then the discount allowed on sale of excess stamp is to be charged to P/L account.

Otherwise the discount allowed should be treated as a Capital Loss and shown separately is Balance Sheet to be amortised at a future date.

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