11 October 2013
Dear experts, My client had purchased an agricultural land in the year 2004 for an amount of Rs.25 lacs and got it registered in her name.she has filed return of income till AY.2004-05, declaring rental income below taxable limit.subsequently my client sold the said agricultural land which came under dispute to a prospective purchaser in as in where is condition for an amount of Rs.85 lacs, but whereas the guidance value fixed by the stamps department was at Rs.1.84 crores and since the purchaser paid the stamp duty on the guidance value and got it registered on 2007.my client recieved the sale consideration of Rs 85 lacs as mentioned in the sale deed. Now last month my client has recieved a notice from the ITO that she has sold the property at Rs.1.84 crs and she is liable to pay up capital gains. my question is 1)since the sale consideration was just Rs.85 lacs and the guidance value was fixed by the authorities at Rs.1.84 crs whether my client is liable for the sale consideration in actuals or the guidance value ? 2) she has not filed the return of income since the income was below taxable limits, and now how do we compute the same ? 3) The ITO says the capital gains is to be paid on the difference of 1.84 crs minus 25 lacs purchase and is asking to file a return of income for 2007-08 and 2008-09. pls suggest and help me out in dealing with this issue. Regards.
12 October 2013
Ya as far as capital gain is concerned on agriculture land guidance value will be considered for capital gain calculation. and now you can't file return of year 2007-08, 2008-09.
12 October 2013
Thanks a lot sir, but my question was is capital gains is applicable ? and if applicable then at what rate as it is a short term. and again can we include expenses incurred over the land after purchase ? what is the way out to minimise the capital gains in this case or escape the same pls advise.
CAclubindia
