Capital tax gain

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  1. Jatin1206

    Jatin1206 New Member

    i purchased a agriculture land in financial year 2017-18 in a partnership firm whose guideline value is 35 lacs but market value is very low-25 lacs.So i paid stamp duty on 35 lakhs but i paid 25 lacs rupees to the seller which is also mentioned in the registry. pls confirm me that is i am also liable to pay a capital tax gain on the difference of Rs10lac? Also if there is any exemption clause or that income can be settled against any expenses pls let me know. If any tax liability is there then how much i have to pay
     
  2. Taxsave.in

    Taxsave.in Member

    Purchase of asset doesn't attract section 45 i.e charging section of Capital Gain. Hence in present case there 's no tax liability in terms of capital gain tax.
     
  3. Jatin1206

    Jatin1206 New Member

    Pls clear or brief on below points regarding my query and your answer.
    Budget 2013 has amended the provisions of Clause (vii) of sub-section (2) of Section 56 and has per this amendment, if a buyer purchases a property for a price below the Circle Rate and the difference in the “Price at which the property has been purchased” and the “Circle Rate” is more than Rs. 50,000, such difference would be assumed to be the income of the purchaser and would be chargeable to tax under head Income from Other Sources. This amendment will come into force from 1st April 2014.

    EXAMPLE OF THE ABOVE PROVISIONS Mr. A purchased a property from Mr. B for Rs. 50 Lakhs. The Stamp Duty Value of this property is Rs. 60 Lakhs. Tax Treatment in the hands of Mr. A (Seller): Rs. 60 Lakhs would be deemed to be the Sale Price and taxed under head “Income from Capital Gains” Tax Treatment in the hands of Mr. B (Buyer) : Rs 10 Lakhs (i.e. 60 Lakhs – 50 Lakhs) would be deemed as inceome.


    Pls confirm on this also.Hoping for early reply.
     
  4. Taxsave.in

    Taxsave.in Member

    Yes, the provisions mentioned above are correct.

    Budget 2013 has amended the provisions of Clause (vii) of sub-section (2) of Section 56 and as per this amendment, with effect from 1st April 2014, if a buyer purchases a property for a price below the Circle Rate and the difference in the “Price at which the property has been purchased” and the “Circle Rate” is more than 50,000, such difference would be assumed to be the income of the purchaser and would be chargeable to tax under the head income from other sources.

    so in your case the difference of 10 lacs shall be taxable as income from other sources.

    However, if an assessee claims that the value so assessed or assessable exceed the fair market value of the property and value so assessed or assessable has not been disputed in any appeal or revision before any authority or court the assessing officer may refer the case to valuation officer.

    Where the value ascertained by the valuation officer:

    • Exceeds the Stamp Duty value: Stamp Duty value shall be taken as sales price
    • Lower than the Stamp Duty value: Value so ascertained by the Valuation officer shall be taken as Sales consideration.
     
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