• Tax liabilities under section 56

I have purchase 1 plot at my town from society who has given me plot @ 900 rs. per sq. ft. and its guideline is 4200/-... i have paid the stamp duty on guiseline, now, how can i save tax under section 56 (2)... can anyone help me and suggest how to save tax amount which is too much for me and i have no money to pay tax.
Asked 7 years ago in Property Law
Religion: Hindu

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5 Answers

1) If property is purchased by any individual below the stamp duty value and if the difference between the stamp duty value and actual purchase price is more than Rs 50,000 then such difference is treated as a income in the hand of buyer and chargeable under head Income from Other Source.

2) you can claim before the assessing officer that stamp duty exceeds the fair market value of property

3) the assessing officer can refer valuation of land to valuation officer to determine fair market value of property

4) If the value assessed by Valuation officer is lower than the stamp duty value, the assessed value shall be consider as deemed sale price.

5) if the reference is made to the Valuation officer then it may be possible that the stamp duty value may decrease but it cannot be increased on the basis of the valuation officer.

Ajay Sethi
Advocate, Mumbai
95205 Answers
7607 Consultations

5.0 on 5.0

If guideline rate is 4200 per square feet and purchase price is 900 per square feet then you have income tax on the difference between the stamp duty value and actual purchase price as difference is more than Rs 50,000 And is treated as a income in the hand of buyer and chargeable under head Income from Other Source.

2) you can take the plea that value of property is 900 per square feet and not 4200 per square feet

3) valuation officer can assess fair market value of the property

Ajay Sethi
Advocate, Mumbai
95205 Answers
7607 Consultations

5.0 on 5.0

If property sold is an immovable property then Section 50C would be applicable, hence Capital Gain = 25 lakh-10 lakh= 15 lakh is taxable.( Subject to indexation).

Stamp Duty value or fair market value of the property is excess of Rs. 50,000/-. Consideration paid is less than stamp duty value/ fair market value and difference between stamp duty value/ fair market value is in excess of Rs. 50,000/-. Hence it is taxable in the hands of vendor.

Taxable amount = 25 lakh – 20 lakh = 5 lakh is taxable under the head “Income from other Sources”

This is the provision of law, you decide.

T Kalaiselvan
Advocate, Vellore
85404 Answers
2236 Consultations

5.0 on 5.0

what are the other sources by which i can save tax .and the differance between guideline and registry amout is 3300 per sq. ft. for 1300 sq. ft area........i m very much depressed to know about these tax liability

When there is no provision in law to get exempted you may have to look for a different route in this regard.

T Kalaiselvan
Advocate, Vellore
85404 Answers
2236 Consultations

5.0 on 5.0

BUT I HAVE PURCHASE PROPERTY FROM HOUSING SOCIETY @ 900 SQ. FT AND GUIDE LINE RATES ARE 4200...........

I ASKED SAME QUESTION BUT DID NOT GET ANSWER EXATLY

Why should the society sell you the property at this lowest rate.

Actually it is the seller who has to pay the capital gains tax

T Kalaiselvan
Advocate, Vellore
85404 Answers
2236 Consultations

5.0 on 5.0

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