Sale of land below stamp duty ?

Is that okay If I Sale a Land Below its "Stamp Duty Value" But Where the STAMP DUTY HAS BEEN PAID IN FULL ?

I'm aware of section 50c which state that SD Value will be considered as the transaction value where the sale is below the SD Value. 


 

Replies (1)
With effect from A.Y. 2003-2004 section 50C has been inserted in the Income Tax Act, 1961 dealing specifically about gross consideration in computation of capital gains in respect of transactions in land or building or both. Section 50C provides that if the value stated in the instrument of transfer is less than the valuation adopted, assessed or assessable by the stamp duty authorities, the valuation as adopted, assessed or assessable by the stamp duty authorities will be considered for the purpose of computation of capital gains arising on transfer of land or building or both. For example if in the agreement for sale, the value of the flat is stated at Rs. 24 lacs but according to the stamp duty authorities the valuation of the flat is Rs. 34 lacs, then it will be considered that the flat has been sold for Rs. 34 lacs and capital gains will be computed on the basis of Rs. 34 lacs. In certain cases, this causes a very difficult situation for the seller of the property as he is required to pay tax on extra money which he never received. Alternately, if he wants to claim exemption by investing in a residential house or capital gains bonds, etc. depending upon the facts of his case, he has to invest an extra amount, which he never received on sale. It is not necessary that one should invest the very sale proceeds in exemption schemes as funds from any sources can be invested to avail exemption. To come out of the difficulty one may consider recourse to relief provisions, but by the time decision in respect of relief provisions come, the time limit for planning investment gets expired. This is the clause. So i am thinking whether u have paid stamp duty in full or not for capital gain purpose your sale consideration will be taken as stamp duty value. And u might have to apply for relief or pay tax on money not received.

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