Religious trust

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Gini Dutta (Querist)
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31 May 2015 a religious trust wholly for religious purpose wants to buy a land for constructing new temple, the market value of land is 5cr but stamp value is 1cr., the seller will register the sale @ value adopted by stamp authorities i.e. 1cr, what should be treatment of 4 cr as trust will withdraw 5 cr from the bank. or what should be done for application of rs. 4cr

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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31 May 2015 Register the documents for 5 Cr. Trust will not lose much by paying stamp duty for market value. Application of 4Cr is not a problem.
Advice the seller agree for the proposal as he can avoid tax payment by availing capital gain exemption u/s 54F/54EC. By keeping the amount in capital gain bonds for three years he can avoid tax.