purchase of agri land lower than stamp duty value

Hi,

If any immovable property is sold below the stamp duty value then in such case double taxation shall apply on the difference in the stamp duty value and transfer price.

Asseessees in order to save Income Tax makes an agreement to sell at price lower than the actual sale consideration and adjust balance amount in cash which adds to his/ her black money. In order to prevent such loss of income tax revenue Section 50C, Sec 43CA and Sec 56(2)(vii)(b) were introduced in the income tax act which plugged this evasion to an extent.
 

Sections - 

As per Section 50C, if a capital asset, being land or building or both, is transferred for a consideration below the stamp duty value, then such stamp duty value shall be the deemed value of the consideration for the purpose of calculating capital gain under Section 48. The original consideration paid for the transfer shall not be considered for the purpose of capital gain in the hands of the seller.

As per section 43CA, if an asset, being land or building or both, is sold below the stamp duty value then such stamp duty value shall be deemed value of the consideration and used for the purpose of computing profit and gains from transfer of such assets.

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.

I hope this answers your question.

Have a good day!