Tax liabilities in case of property purchases

Tax queries 10245 views 4 replies

pankaj p mistry

Consulting in tax

93 Points Joined June 2012

dear all,can u help me to reply to ito...
whether purchaser is liable to pay tax for different between apparent consideration and value from stamp valuation authority u/s section 50 c of incometax.where the actual consideration is less than the valuation done by SVA ?

Replies (4)

CA Pooja Sharma

Chartered Accountant

192 Points Joined August 2013

Sir, in this case Capital Gain should be calculated by using Valuation made by SVA as sale consideration U/s 50c. there is an exception if the assessee may prove that the Fair Market Value of the property was lower than valuation made by SVA before the Income Tax Authorities.

pankaj p mistry

Consulting in tax

93 Points Joined June 2012

Originally posted by : POOJA SHARMA
	Sir, in this case Capital Gain should be calculated by using Valuation made by SVA as sale consideration U/s 50c. there is an exception if the assessee may prove that the Fair Market Value of the property was lower than valuation made by SVA before the Income Tax Authorities. pooja...thanks a lot but my question is whether purchaser is liable to pay tax ? whether purchaser is liable to pay tax Read more at: /forum/details.asp?quote=1226112&mod_id=263459#reply whether purchaser is liable to pay tax Read more at: /forum/details.asp?quote=1226112&mod_id=263459#reply whether purchaser is liable to pay tax Read more at: /forum/details.asp?quote=1226112&mod_id=263459#reply whether purchaser is liable to pay tax Read more at: /forum/details.asp?quote=1226112&mod_id=263459#reply

CA LOVELY ARORA

C.A. B.Com (H) Graduate

2151 Points Joined August 2008

Dear Sir,

No, the purchaser is not required to pay any tax on that transaction, as finance Act, 2010 amended sec. 56(2)(vii) to specifically exclude such transactions from "income under other sources"... so, he is not liable for any tax payment.. only seller is required to pay tax.

Best Regards,
CA Lovely Arora
ca.lovelyarora @ gmail.com

CA Deepika Jain

Working on Assignment Basis

34 Points Joined March 2011

Dear Pankaj,

Your Question is whether purchaser is liable to pay tax on such difference.

For the purchase there is no question to pay any tax as he has not made any profit.

But when such purchaser would sale his property then Cost Of Acquisition for such property shall be taken to be actual Cost not the Value determined by Stamp Valuation Authority.

Conclusion Purchaser is not liable to pay any tax.

Regards

Deepika Jain