Vijay Goyal (Tax Consultant) 20 October 2010

INCOME TAX ACT SECTION 50C

DEAR MEMBER,

I have in problem.

My client purchased as Flat at urban area with joint name, both are female

Details of property

Name of owner : Smt S. Agarwal & Smt S. D. Agarwal

D O entering into agreement for purchase : 03.04.2006

D O Registry : 30.03.2010

Value of Purchase property : 20 lakh

Stamp duty value for Govt : 40.50 Lakh

Now my assesse want ot sale her property.

Problem is that actual selling value of such property is 25 Lakh.

Govt Stamp duty value is near Rs. 45 Lakh.

According to latest amendment Section 50C of IT Act AO of IT Department will consider the stamp duty Value as capital gain profit. It will attract big amount of income tax.

What i have to suggest my client?

Plz guide me.

Thanks.

Reply Follow

1 Replies

Shayan Khan (B.com) 21 October 2010

Dear friend,

If the assessee claims that the stamp duty value exceeds the fair market value of the property as on the date of transfer, The A.O. may refer the valuation of the capital asset to the valuation officer.

such reference shall be made only if the stamp duty value has not been disputed in any appeal or revision before any authority/Courts.

if such reference is made the provisions of sec. 16A of the Wealth Tax Act shall apply with necessary modifications.

Thank You!