Tax implication for Regn. of Immoveable Property for Lower
This query is : Resolved
30 August 2010
What is the tax liabilty for purchase of immovable property when payment is less than the Fair market value fixed by stamp authorities for the period from 01.04.2009 to 31.03.2010.
30 August 2010
No tax implication as the clause has been deleted.
30 August 2010
AS FAR AS I KNOW
If any immovable property received –
(a) without consideration, the stamp duty value of which exceeds Rs.50,000,
the stamp duty value of such property will be chargeable.
(b) For a consideration, which is less than stamp duty value of property by an
amount exceeding Rs.50,000, the stamp duty value of such property as
exceeds such consideration will be chargeable.
If any immovable property received –
(a) without consideration, the stamp duty value of which exceeds Rs.50,000,
the stamp duty value of such property will be chargeable.
(b) For a consideration, which is less than stamp duty value of property by an
amount exceeding Rs.50,000, the stamp duty value of such property as
exceeds such consideration will be chargeable.
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31 August 2010
sir the provisions as mentioned by you were to apply from 01.10.2009. However in the finance act 2010 the said provisions as mentioned by you has been deleted if property is received for a consideration less than stamp duty valuation and if the same is received without any consideration then the same is liable for tax in the hands of the individual receiving it without consideration.
31 August 2010
PLEASE CHECK
BOOK- V. K. SINGHANIA
PAGE NO - 586
PARA NO. - 199.1
BOOK- V. K. SINGHANIA
PAGE NO - 586
PARA NO. - 199.1
31 August 2010
Read finance act 2010
Amendment of section 56.
21. In section 56 of the Income-tax Act, in sub-section (2),—
(a) in clause (vii),—
(i) for sub-clause (b), the following sub-clause shall be substituted and shall be deemed to have been substituted with effect from the 1st day of October, 2009, namely:—
“(b) any immovable property, without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property;”;
and also section 56(2)(vii)
[(vii) where an individual or a Hindu undivided family receives, in any previous year, from any person or persons on or after the 1st day of October, 2009,—
(a) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum;
38b[(b) any immovable property, without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property;]
Amendment of section 56.
21. In section 56 of the Income-tax Act, in sub-section (2),—
(a) in clause (vii),—
(i) for sub-clause (b), the following sub-clause shall be substituted and shall be deemed to have been substituted with effect from the 1st day of October, 2009, namely:—
“(b) any immovable property, without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property;”;
and also section 56(2)(vii)
[(vii) where an individual or a Hindu undivided family receives, in any previous year, from any person or persons on or after the 1st day of October, 2009,—
(a) any sum of money, without consideration, the aggregate value of which exceeds fifty thousand rupees, the whole of the aggregate value of such sum;
38b[(b) any immovable property, without consideration, the stamp duty value of which exceeds fifty thousand rupees, the stamp duty value of such property;]
31 August 2010
that means DIRECT TAX AMMENDMENT PUBLISHED BY ICAI IS WRONG AND BOOKS OF V.K. SINGHANIA IS ALSO WRONG.
FOLLOWING DETAIL IS FROM DT AMMENDMENT FOR NOV 2010 EXAM.
(Effective from 1st October, 2009)
7. INCOME FROM OTHER SOURCES
(a) Transfer of movable/immovable property without consideration or for
inadequate consideration to be taxed in the hands of the recipient [Section
56(2)(vii)]
Related amendment in sections: 2(24) & 49(4)
(i) As per section 56(2)(vi), any ‘sum of money’ exceeding rupees fifty thousand
received without consideration by an individual or HUF will be chargeable to
income-tax in the hands of the recipient under the head ‘Income from other
sources’. However, receipts from relatives or on the occasion of marriage or
under a will would not be treated as income. Likewise, anything which is
received in kind having ‘money’s worth’ (like property) would be outside the
ambit of section 56.
(ii) New clause (vii) has been inserted in section 56(2) to bring within its scope,
the value of any property received without consideration or for inadequte
consideration. For this purpose, “property” means immovable property being
land or building or both, shares and securities, jewellery, archaeological
collections, drawings, paintings, sculptures or any work of art.
(iii) If an immovable property is received without consideration, the stamp duty
value of such property would be taxed as the income of the recipient if it
exceeds Rs.50,000. In case an immovable property is received for inadequate
consideration, and the difference between the stamp duty value and such
consideration exceeds Rs.50,000, such difference would be taxed as the
income of the recipient.
If the stamp duty value of immovable property is disputed by the assessee, the
Assessing Officer may refer the valuation of such property to a Valuation
Officer. In such a case, the provisions of section 50C and section 155(15)
shall, as far as may be, apply for determining the value of such property.
(iv) If movable property is received without consideration, the aggregate fair market
value of such property on the date of receipt would be taxed as the income of
the recipient if it exceeds Rs.50,000. In case movable property is received for
inadequate consideration, and the difference between the aggregate fair market
value and such consideration exceeds Rs.50,000, such difference would be
taxed as the income of the recipient. The CBDT would prescribe the method of
determination of fair market value of a movable property.
FOLLOWING DETAIL IS FROM DT AMMENDMENT FOR NOV 2010 EXAM.
(Effective from 1st October, 2009)
7. INCOME FROM OTHER SOURCES
(a) Transfer of movable/immovable property without consideration or for
inadequate consideration to be taxed in the hands of the recipient [Section
56(2)(vii)]
Related amendment in sections: 2(24) & 49(4)
(i) As per section 56(2)(vi), any ‘sum of money’ exceeding rupees fifty thousand
received without consideration by an individual or HUF will be chargeable to
income-tax in the hands of the recipient under the head ‘Income from other
sources’. However, receipts from relatives or on the occasion of marriage or
under a will would not be treated as income. Likewise, anything which is
received in kind having ‘money’s worth’ (like property) would be outside the
ambit of section 56.
(ii) New clause (vii) has been inserted in section 56(2) to bring within its scope,
the value of any property received without consideration or for inadequte
consideration. For this purpose, “property” means immovable property being
land or building or both, shares and securities, jewellery, archaeological
collections, drawings, paintings, sculptures or any work of art.
(iii) If an immovable property is received without consideration, the stamp duty
value of such property would be taxed as the income of the recipient if it
exceeds Rs.50,000. In case an immovable property is received for inadequate
consideration, and the difference between the stamp duty value and such
consideration exceeds Rs.50,000, such difference would be taxed as the
income of the recipient.
If the stamp duty value of immovable property is disputed by the assessee, the
Assessing Officer may refer the valuation of such property to a Valuation
Officer. In such a case, the provisions of section 50C and section 155(15)
shall, as far as may be, apply for determining the value of such property.
(iv) If movable property is received without consideration, the aggregate fair market
value of such property on the date of receipt would be taxed as the income of
the recipient if it exceeds Rs.50,000. In case movable property is received for
inadequate consideration, and the difference between the aggregate fair market
value and such consideration exceeds Rs.50,000, such difference would be
taxed as the income of the recipient. The CBDT would prescribe the method of
determination of fair market value of a movable property.
31 August 2010
See what is applicable for exams and what are retrospective amendments is different. The Finance Act got approved in the month of May and hence the retrospective amendments made by the Act are not applicable for November 2010 exams as the same was not there 6 months before the exams.
Please read Income Tax Act 1961 as amended by the Finance Act 2010 and then revert on the same which is also reproduced in the post above.
Please read Income Tax Act 1961 as amended by the Finance Act 2010 and then revert on the same which is also reproduced in the post above.
31 August 2010
LET OTHER EXPERTS VIEWS ARE ALSO SOLICITED.
31 August 2010
Ok. Other experts view also solicited on this.
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31 August 2010
The question is Purchase of immovable property. Whereas Sanat Ji has answered for property transferred without out consideration covered under section 56 of the Income tax Act,1961 that too the pre amended position. As far as section 56 is concerned, though not the issue in question, I concur with the view of Aditya ji being the post amended provisions which is prevailing now. I noticed this even on 30th August itself but waited for other members view.
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31 August 2010
OK THANK FOR YOUR COMMENT AND ALSO THANK TO ADITYAJI.
31 August 2010
Thanks for the clarification to both... Mr. Adi & Mr. Warrier
31 August 2010
Thanks to Mr. Warrier for the clarification.
Also, one point to mention here is that, its right that this amendment will not be effective to the Nov 2010 Exams, since the amendments made within 6 months is not applicbale to Exams. So from exam point of view Sanat Ji is right.
But in practical life, the present situation as said by Aditya Ji is valid.
Also, one point to mention here is that, its right that this amendment will not be effective to the Nov 2010 Exams, since the amendments made within 6 months is not applicbale to Exams. So from exam point of view Sanat Ji is right.
But in practical life, the present situation as said by Aditya Ji is valid.
31 August 2010
AGREED WITH WARRIERS JI.
SANAT JI REFERRED SECTION 56 FOR TRANSFER OF IMMOVABLE PROPERTY WITHOUT ADEQUATE CONSDIERATION .
WHILE IT IS THE CASE OF PURCHASE OF IMMOVABLE PROPERTY HENCE ADITYA JI VIEW IS CORRECT.
SANAT JI REFERRED SECTION 56 FOR TRANSFER OF IMMOVABLE PROPERTY WITHOUT ADEQUATE CONSDIERATION .
WHILE IT IS THE CASE OF PURCHASE OF IMMOVABLE PROPERTY HENCE ADITYA JI VIEW IS CORRECT.
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