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Saksham Garg (Article Assistant )     14 July 2021

Section 50C (2) & Section 56(2)(x)

In many areas of Delhi and NCR the market value of properties is below the circle rate. In such case the Income Tax Act permits such transaction both for the buyer as well as the seller in terms of the following provisions of the Income Tax Act.

A.In the case of Seller:

Section 50C (2) provides as under:

Without prejudice to the provisions of sub-section (1),where-

a)The assessee claims before any Assessing Officer that the value adopted or assessed (or assessable) by the stamp valuation authority under sub-section (1) exceeds the fair market value of the property as on the date of transfer;

b)the value so adopted or assessed (or assessable) by the stamp valuation authority under sub-section(1) has not been disputed in any appeal or revision or no reference has been made before any other authority, court or the High Court.

B. In the case of Buyer

3rd Proviso of section 56(2)(x) provides as under:

where the stamp duty value of immovable property is disputed by the assessee on grounds mentioned in sub section (2) of section 50 C, the Assessing Officer may refer the valuation of such property to a Valuation Officer, and the provisions of section 50C and sub-section (15) of section 155 shall, as far as may be, apply in relation to the stamp duty value of such property for the purpose of this sub-clause as they apply for valuation of capital asset under those sections;

Query: In computax software, if we select the option that the difference between stamp duty value and actual consideration is more than 10% (i.e. actual consideration being less than stamp duty value) then it automatically calculates capital gains tax taking stamp duty value as full value consideration. If the actual market value of the property is lower than the 10% of stamp duty value, how will it be disclosed in ITR Form-2? Kindly clarify.

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