Hi,

You need to pay only proportionate amount.

If a buyer purchases a property for a price below the Circle Rate and the difference in the “Price at which the property has been purchased” and the “Circle Rate” is more than Rs. 50,000, such difference would be assumed to be the income of the purchaser and would be chargeable to tax under head Income from Other Sources under Section 56(2)(x)

See on purchase of property you don't have to pay income tax you need to pay the stamp.duty for registration at the government circle rate.

Hi

1) Since you have purchased the property in a bank auction, you are not liable to pay any income tax on difference amount between auction price and the market price.

2) ) Same is applicable to Stamp duty and registration fees as the stamp duty and registration fees is payable only on the sale value through auction and not on market price.

3) Please note each state government prescribes circle rate/market rate for properties lying in  a particular locality and this is circle rate/market rate fixed by government.  

4) You should also aware that in any  bank auction, banks are mandated in law to quote the reserve price(which is the circle/market/ rate prescribed the government) and NOT sell the property below the reserve price.  So technically the banks are prohibited from selling the properties at any thing less than the circle rate/market rate fixed by the government. This is the rule of law and it applies to all properties (disputed, dilapidated, incorrect boundaries, assigned lands, title by adverse possession etc)

5) Under SARFESAI ACT, if the property is sold below the market price (which is the reserve price), then the owner of the property can always challenge  the auction procedure in court of law and get order in his favour.

Hope this information is useful.

As per Section 56(2)(x), any person receives an immovable property for a consideration which is less than the stamp duty value of the property by an amount exceeding fifty thousand rupees, stamp duty value of such property as exceeds such consideration shall be taxable as income in the hands of buyer and chargeable under the head Income from Other Sources.

Income tax in form of capital gains tax is applicable when you sell the property 

You are purchasing the property 

Also the bank must have given the reserve bid price

The bidders will obviously bid above the reserve price and highest bidder or H1 will qualify as successful bidder

This is not a sale transaction between two private parties to whom the deeming provisions u/s 50C is applicable

So in my opinion no tax will be payable if there is a differential between purchase price and market value 

If the Sale Price is more than Rs 50,00,000/- (Rupees Fifty Lakh only) then the auction
purchaser/successful bidder has to deduct 1% of the Sale Price as TDS in the name of the owner of
the property & remit it to Income Tax Department as per section 194 IA of Income Tax Act and only
99% of the Sale Price has to be remitted to the Bank. The Sale Certificate will be issued only on
receipt of Form 26QB & Challan for having remitted the TDS.
The purchaser shall bear the applicable stamp duties/ additional stamp duty/ transfer charges, fee etc. and also all the statutory/ non-statutory dues, taxes, rates, assessment charges, fees etc. owing to anybody.

You don't need to pay income tax at the time of purchase of"property.

Dear Sir,

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