Sir we have agreaed to sell our shop to my real brother with mou or deed on stamp paper on 2011. 48 lk by reciveing cheq on that day lumsum, but the agreement was done on 2014 for the same amount n stampduty paid on same but income tax say that u have not made the agreement with the ready recknor on 2014 ,but we have all ready sold the shop n given possesion to real brother in 2012 as per our family settelment which is mention in mou wat should we do he is adding tax . in section 56 vii it is benefits to purchaser as he is my real brother, but seller as we r adding tax in section 50c so wat should we do please reply
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1)s ection 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 .
2) Thus, capital gains tax would be calculated on the value of the property as fixed by the Stamp Valuation Authority especially when such value is higher than the declared value of the property as appearing in the sale deed
sir as we have all ready mention on mou done on 2011 that our family member have agreed to sale shop to our real brother we could make that by way of gift, but we have not taken some expert advice to do so ,we made agreement with brother to sell shop as the ready reckoner price which was in 2011 was 48 lk n we have recived the cheque from my brother in 2011 n given the possesion of the shop at that time only n remaining cheque amount was taken by us till 2017 but the agreement was done on 2014 that time ready recnoker price was 98 lk i want know that wheather in blood relation ship section 50 c of income tax is aplicable or not ?
Gift deed ought to have been executed it would have attracted concessional stamp duty in Maharashtra at 2 per cent of market value
2)it is provided in section 50C that even though the higher valuation by stamp duty authorities has not been disputed, the seller of the property may represent before the Income Tax Officer that the valuation adopted by stamp duty authorities is higher than the fair market value of property on the date of transfer and that the Income Tax Officer may refer the matter of valuation to the Valuation Officer of the Income Tax Department itself. Although the word used is “may”, the ITO has to refer the case for valuation once requested by the assessee. If the valuation by the Valuation Officer of the IT department is lower, then such lower valuation is to be adopted by the Income Tax department for the purpose of capital gains taxation under section 50C.
3) it is applicable to blood relationships also
1. You have sold the shop in the year 2011. Did you register the sale deed in favour of your brother in the year 2011?
2. If not and if you have registered the deed in the year 2014, you shall have to pay the stamp duty and also income tax treating the consideration based on the present reckoner price.
3. However, if you had mentioned in your sale deed registered in the year 2014 that the sale was taken place in the year 2011 which you are registering in the year 2014, then you would have had some ground to contest the claim of the income tax department.
In your case the execution of the deed done in the year 2011 but registration of the deed is done at 2014.So income tax treating the consideration based on the present reckoner price. It is your duty pay the tax at the time of registration and not the date of execution of agreement. Contact a local lawyer who practice TAX matter.
Maharashtra Govt. waives stamp duty on transfer of land or flat immovable property to Kin or family members. It announced that now immovable property such as land, house or flat can be transferred to Owner’s Children or even to blood relatives simply by executing transfer deed on Rs. 500/- stamp paper without paying stamp duty and registration fee. This announcement will give good relief to the families of transferors as they will not require to pay 5% stamp duty at market value as per ready Reckoner. Minister further clarified that in such an event it will be sufficient if transfer document is executed on Rs.. 500/- stamp-paper.
However since you claim that sale agreement was made in the year 2014 when this ruling was not in vogue, you may have to abide by the rules in vogue on that date.
You can make a representation in writing by giving the details of the stamp duty paid was based on the MOU for sale dated 2012.
However if you have received any notice in this regard, you may have to give a reply through your lawyer properly based on the prevailing circumstances.
we made agreement with brother to sell shop as the ready reckoner price which was in 2011 was 48 lk n we have recived the cheque from my brother in 2011 n given the possesion of the shop at that time only n remaining cheque amount was taken by us till 2017 but the agreement was done on 2014 that time ready recnoker price was 98 lk i want know that wheather in blood relation ship section 50 c of income tax is aplicable or not ?
The present rule to exempt the transfer of immovable property within blood relations are exempted from stamp duty has come into force after the sale agreement entered between you and your brother, hence the demand for stamp duty is justified, however if the sale deed has not been registered till this date, you may argue about the exemption from payment of stamp duty on the basis of the present situation.
Take the assistance of a lawyer and issue a reply notice accordingly, if the authorities are convinced then they may give a favorable reply.