Tax querry

Hi..

Can i have some examples of adequate and inadequate consideration

Replies (11)

refer the case laws on that matters.

thats only shall be best example.

Read by this link

https://humanum.arts.cuhk.edu.hk/Philosophy/Locke/echu/lok0041.htm

Adequate consideration and inadequate consideration can be understood by a very simple example. Suppose. if you are going to buy some property having a fair market value of Rs.10 Lacs, but you are either paying 15 lacs for the same just to increase your cost of purchase or you are paying Rs. 6 lacs just to give benefit to the seller by reducing his sale consideration and hence the capital gains. In this case it shall be assumed that you are paying inadequate consideration. It can be both ways, either for yourself, or for someone known. You need to prove the adequacy of the transaction.

Originally posted by :CA.Tarun Maheshwari
" Adequate consideration and inadequate consideration can be understood by a very simple example. Suppose. if you are going to buy some property having a fair market value of Rs.10 Lacs, but you are either paying 15 lacs for the same just to increase your cost of purchase or you are paying Rs. 6 lacs just to give benefit to the seller by reducing his sale consideration and hence the capital gains. In this case it shall be assumed that you are paying inadequate consideration. It can be both ways, either for yourself, or for someone known. You need to prove the adequacy of the transaction. "


 

Good explanation.....

U/s.24 we have provision for claiming the "prior period interest" in 5yers .... But do we hav any provision for claiming deduction U/s80 C for those principle installments paid during the construction period after the construction is over?

Coz in a point it says "those installments paid during the construction period cannot be claimed u/s. 80C during construction period!

Thanks Tarun, clean explanation.

Thanks Tarun, clean explanation.

 good

Very nice explanation by tarun sir......

For claiming U/s 80c pre- construction or post construction is dosen't matter... usually repayment will start only after construction....

Dear Friend

in my views Adequate Consideration means consideration is fixed for example you are purchasing a House with 5 Ac's fixed in house an done car Honda City and u r paying 50 Lacs + 50 Thousand + 6 Lacs respectively its calles Adequate consideration

and if u paying lump sump 56 lacs then its Inadequate

Thanks

Nitin Grover

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