U/s. 50c of income tax act.

This query is : Resolved

BAJAJ JAGDISHKUMAR LALCHAND (Querist)
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04 February 2016 IN ASSESSMENT YEAR 2013-14 , I SOLD OUT RESIDENTIAL HOUSE TO MY BHABHI ( BORTHER'S WIFE ( RELATIVE) AT RS. 10 LACS BY SALES DEED, WHILE STAMP DUTY VALUE OF RESIDENTIAL HOUSE IS RS. 19,50000/-, THE ASSESSING OFFICER SAYS THAT TRANSFER IS MADE THROUGH SALES DEED , NOT BY GIFT DEED SO, WHILE CALCULATING THE CAPITAL GAIN, STAMP VALUE SHOULD BE TAKEN AS SALES CONSIDERATION, FOR PURPOSE OF CALCULATING THE CAPITAL GAIN TAX AND PAY CAPITAL GAIN ACCORDINGLY
WHILE AS PER MY VIEW DIFFERENCE AMOUNTOF RS. 950000/- IS DEEMED GIFT TO RELATIVES, SO IT DOES NOT COVERED UNDER CAPITAL GAIN TAX .
IMMOVABLE PROPERTY FOR CONSIDERATION WHICH IS LESS THAN THE STAMP DUTY VALUE IS DEEMED GIFT UNDER THE INCOME TAX ACT.
PL. GUIDE US

CA CMA CS Ram Pavan Kumar Melam

CA CMA CS Ram Pavan Kumar Melam (Expert)
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05 February 2016 The transaction entered by you is 'transfer' [sec. 2(47)] as you executed 'sale deed' of 'capital asset' [sec. 2(14)] i.e. 'residential house property' and the transaction not covered under u/s 47 i.e. 'transaction not regarded as transfer' such as 'gift, will, inheritance etc'.
With the above information:
Firstly, you are liable for capital gains tax u/s 45 either Long term capital gain [Sec. 2(29B)] or short term capital gain [Sec. 2(42B)] depending on period of holding [Sec. 2(42A)] ;
Second, you have to consider, the full value of consideration as per section 50C i.e. value as per stamp value authority, which shall be the minimum value.
Third, your brother's spouse is not liable to tax u/s 56(2)(vii) on receipt of property for a consideration less than the stamp duty value as she covered under the relative definition as per section 56(2)(vii)(e).

Saket Jain

Saket Jain (Expert)
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06 February 2016 Section 50(C) is applicable to you thus higher of Sale deed value or stamp duty value will be sale consideration. If you think that stamp value is high in comparision to prevailed market price you can request him to value the premises. In this scenerio if valuation officer value is lower the stamp duty valuation then valuation officer value will be considered.
Your bhabhi is not liable to pay tax as she is covered under definition of relative

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