the sale deed can mention actual consideration paid at Rs 50 crores

2) however you would have to pay stamp duty at circle rate

3) for the purpose of calculation of capital gains circle rate would be taken into consideration and not the price mentioned in sale deed .

4) section 50C of the Income-tax Act, 1961 clearly mentions that the liability on capital gains would arise on the value of the property as fixed by the state valuation authority .

5) Delhi HC has held that regsitrar cannot refuse registration if property value mentioned is lower than circle rate . document can be referred for adjudication to the collector . after hearing the parties collector has to to determine correct valuation of property

Each state government has a pre-decided minimum valuation on which the stamp duty is to be paid. This p[re-decided minimum valuation is called circle rate. In common parlance, it is also referred to as the stamp duty value i.e., the rajte ion which the stamp duty is to be paid.

As per section 50C, if a property is sold below the circle rate,circle rate of the property would be deemed to be rate at which the property has been sold and capital gains tax would be levied assuming that the property has been at the circle rate.

Irrespective of the consideration for the which the property has been sold, if it has been sold for a rate below the circle rate, the circle rate would be assumed to be the sale price, and capital gains tax would be levied.

Section 56(2)(vii) – This section is applicable from 1st April 2014. If a property is purchased by any individual or HUF 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.

Where assessee claims before any Assessing Officer that the stamp duty value exceeds the fair market value of the property as on the date of transfer, trhen, the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer.

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

b) If the value assessed by Valuation officer is higher than the stamp duty value, the stamp duty value remain deemed sale price.

So, 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.