Capital Gain

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

04 February 2011 We had purchased one shop in 2005 and paid Rs. 1200000.00 as full consideration to the seller. I got possession of the shop and rented the same . Since then I am offering rental income for taxation.

But conveyance deed was not executed between us. Now seller want to make sale deed.

As per Stamp Act of Maharastra , the valuation of the said shop is RS. 4200000.00 and I had to pay stamp duty on Rs. 4200000.00. My question is as under :-
1)Seller is liable to pay capital gain tax on Rs. 1200000.00 or Rs.4200000.00 ?

2)For capital gain tax whether it is necessary to execute sale deed or handover of possession is sufficient ?

3) If sale is deed is necessary then what will be treatment of rental income shown in my return ?

Please guide.

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
Follow

05 February 2011 1. Seller to pay Cap gain tax on the basis of Rs. 42 lakhs consideration.

2. Execution of sale deed is not necessary, But tax will be calculated on the basis of Value as per Stamp.

3. Rental income is taxable without the sale deed.