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capital gain

CA Amit (Service) (38 Points)

08 May 2010

In case of sale of land the full value of consideration will be actual proceeds or amount in which registry is done

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2 Replies

(Guest)

Dear Amit,

Section 50C of the Income Tax Act provides that the full value of consideration in respect of immovable property will be the guideline value adopted for stamp duty.

If, however, the assessee were to claim that a value lesser than the guideline value be taken to be the full value of consideration, the Assessing Officer may refer the valuation of the immovable property to a Valuation Officer whose valuation will be binding in so far as the value arrived at by the Valuation Officer exceeds the value claimed by the assessee to be the full value of consideration.

However if the value determined by the Valuation Officer is higher than the guideline value, the guideline value will be adopted as the full value of consideration. This reference to the valuation officer can be made only where the assessee in any appeal, revision or reference has not disputed the guideline value.

If the assessee in any appeal, revision or reference under the relevant Act has disputed the guideline value, then the value as determined by the appellate or revisionary authority under the relevant Act will be taken as the full value of consideration for determining capital gain.

So long as you question the guideline value – value adopted for stamp duty purposes before the Assessing Officer as not being the correct value to be taken for computation of capital gains, your case should be referred to a Valuation Officer.

It is presumed that the buyer has not questioned the value adopted for stamp duty purposes.

Regards

K.Ilayaraja

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Aditya Maheshwari (CA in Practice) (35867 Points)
Replied 08 May 2010

Provisions of Section 50C will apply in case of sale of land and hence the sale consideration will the registered value if it less than actual proceeds.