Entry for purchase of land

This query is : Resolved

kumar (Querist)
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02 April 2018 Dear sir,

We have paid purchase price for land Rs 2 Cr and stamp duty paid on Rs 3 Cr. How much we record in books whether 2 Cr or 3 cr.

Please provide the entry. and what will be the impact from income tax point of view.

Thanks

ND (Expert)
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02 April 2018 The cost of land will be Rs. 2 Cr along with the cost of stamp duty paid. Under Income Tax please refer section 50C wherein it is stated if value for stamp duty is higher than the actual cost, then value for stamp duty will be treated as the cost . However there will not be any change in the accounting entry but for calculating capital gains, etc the value for stamp duty shall be considered.

kumar

kumar (Querist)
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02 April 2018 Thanks for reply. Means accounting entry will be as follows :-

Land a/c ----- Dr 2 Cr
Stampduty a/c ------------- Dr
To Bank

Sir, have following doubt under income tax purpose

1) will 50c applicable ?
2) capital gain impact will arise when we sale the land and will be calculated on the basis of paid price, is it correct ?

Thanks

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