INCOME TAX ON CIRCLE RATE

This query is : Resolved

bishan singh negi (Querist)
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23 January 2010 HI,

GREETINGS OF THE DAY,
MY CLIENT WANTS PURCHASED A PLOT FROM MR A @ 4000/- PER SQ.MTR. THE PLOT ALLOTED TO MR A BY HSIIDC .
MY QUERRY IS THE CIRCLE RATE IS IN THAT AREA OF RS 6000/-. MY CLIENT IS AGREE TO PAY STAMP DUTY ON CIRCLE RATE i.e. RS 6000/- AND ACTUALLY HE IS PAYING FOR PLOT 4000/- PER SQ. MTR.
ONE OF CA TOLD MR A THAT THE DIFFERENCE BETWEEN 6000/- TO 4000/- OF RS 2000/- WILL BE ASSUMED AS GIFT AND MR A WILL BE LIABLE TO PAY INCOME TAX ON 2000/- PER SQ. METER.
IS IT RIGHT OR WROUNG PLEASE

THANKING YOU IN ADVANCE.

CA Vijay Kumar Gupta

CA Vijay Kumar Gupta (Expert)
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23 January 2010 The CA is right. Refer section 56 of the I. Tax Act with latest amendment effective from 1-10-2009.

C.A.Amitabh Gupta

C.A.Amitabh Gupta (Expert)
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23 January 2010 That CA is right. Your client ( Purchaser ) will be taxed u/s 56(2)(vii) under "Income from other sources" for the difference of Rs.2000/- per sq.ft . Mr.A ( seller) will be taxed u/s 50C for capital gains for value of stamp duty as full value of consideration of plot sold i.e @ Rs.6000/- per sq.ft

Rgds
CA Amitabh Gupta
Indore
ag_ind@rediffmail.com

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