Can purchase value of property be lower than stamp value? If yes to what extent? Is value of property is 5% less than stamp value acceptable?
Kamal Verma (Financial advisor) (578 Points)
11 September 2019Can purchase value of property be lower than stamp value? If yes to what extent? Is value of property is 5% less than stamp value acceptable?
Suresh Thiyagarajan
(Student)
(3986 Points)
Replied 11 September 2019
1. Sec 50C is for the purpose of computation of capital gains and not for any other purpose.
2. As per 3rd proviso to sec 50C it is hereby clarified that if the value determined by the stamp valuation authority is not more than 105% of the sale consideration then for the purpose of sec 48 actual sale consideration will be used in arriving at capital gains.
3. From the angle of the purchaser as per sec 56(2)(x) stamp duty value should not be more than 5% of the actual amount paid for that immovable property. If this condition is not satisfied and the differential amount exceeds Rs. 50,000 then the same differential amount will be taxed under the head "Income from Other Sources".
Please correct me if the above solution has an alternative view.
Kapadia Pravin
(17249 Points)
Replied 11 September 2019
GST Live Certification Course (39th Batch) - April 2024 (Weekend Batch) (With Certificate)
"Live class on Python for Financial Analysis: Unlocking Efficiency in Accounting and Finance"
CAclubindia
