Stamp duty and cg on dissolution of firm
sbc
(Querist) 06 December 2014
This query is : Resolved
At the time dissolution of HUF, share in property want to transfer by execution of agreement, is capital gain will be attracted to the huf ? who will require to pay stamp duty ? what is the % ? on which amount stamp duty is payable ?
ajay sethi
(Expert) 07 December 2014
raise your query in CA club india .com
Anirudh
(Expert) 07 December 2014
Dear SBC,
I take it that first the property of the HUF will be sold off and then the HUF will get dissolved. If that is correct, then the capital gain has to be paid by the HUF. Only the balance sale proceeds, after paying the applicable capital gains tax, can be distributed to the members of the erstwhile HUF.
Who will pay the stamp duty will depend upon the terms and conditions of the agreement to sell entered into by you. The expenditure on stamp duty can be borne either by the seller or the buyer.
Stamp duty is payable either on the guidance value or the actual sale consideration whichever is more. The rate of stamp duty also varies depending upon who the purchaser is i.e. whether it is a female or a male. In Delhi it is 6% in case of female buyer and 8% in case of male buyer. It is 8% in case it is a female-male joint purchase.
In case stamp duty is paid on circle rate, but consideration is shown less than stamp value, then the difference will be taken as "income from other sources" in the hands of the buyer and taxed in his hands.
The stamp duty value will be taken as the full value of consideration received by the seller (ignoring the actual sale consideration shown in the sale deed) and capital gains tax will be charged accordingly.
IF, the HUF gets first dissolved and the property is allocated to each of the members of the HUF - in that case at the time of partition, no stamp duty is required to be paid. No capital gain is also involved.
However, as and when any member of the erstwhile HUF, sells the property then capital gain will get attracted in his hands in respect of the property being sold by him. Needless to say, there are provisions in the income tax act providing for saving of Capital Gains Tax by using the amount of capital gain in purchasing new property within stipulated time, or depositing the amount of capital gain in specified assets etc. But conditions apply for such options.
Dr J C Vashista
(Expert) 08 December 2014
Very well advised by expert Mr. Anirudh, nothing more to add.
malipeddi jaggarao
(Expert) 09 December 2014
I too agree that Mr.Anirudh advised the query aptly.
Guest
(Expert) 09 December 2014
Better Meet your Auditors in Person Or Meet a CA or post this Query in CA Club Forum to Not to Get Misguided Please
Anirudh
(Expert) 09 December 2014
Yes, this good for nothing fellow has nothing to contribute.
As he has given false profile, he doubts others also.
He is the one with his half baked knowledge, and only two year standing, sounds a great expert and many of his advices are not according to law. Therefore beware before acting on his highly doubtful advice.
Guest
(Expert) 09 December 2014
Anonymous had spoken about him self Good
Anirudh
(Expert) 09 December 2014
You false profile fellow, you cannot dodge the issue by saying anything like that.
I meant only you, YOU AND YOU.
As you know, I have not even given any profile. IT IS YOU WHO GAVE THE UTTERLY FALSE PROFILE. THEREFORE MY POST REFERS SQUARLY YOU and by no stretch of imagination it refers to me.
YOU FALSE PROFILE FELLOW YOU CANNOT HIDE ANYMORE AND CANNOT SHOW YOUR BRAVADO ANYWHERE.
Guest
(Expert) 09 December 2014
No Replies to Anonymous
Anirudh
(Expert) 09 December 2014
FELLOW WITH FALSE PROFILE CANNOT BE TRUSTED.
IF NOT FILLING PROFILE IS "ANONYMOUS" SO BE IT. THAT IS BETTER THAN FILLING FALSE PROFILE. SHAME SHAME.
V R SHROFF
(Expert) 09 December 2014
TAX CONSULTS CAN GUIDE YOU WELL
T. Kalaiselvan, Advocate
(Expert) 10 December 2014
Though the query basically a taxation law query, expert Mr. Anirudh has explained the proposition of law as well as the issues involved including the taxes suffered as capital gains or the stamp duty payable, what and how much in a very convincing and informative manner, which I agree and concur with him.
