Do i have to pay tax on the property i bought

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  1. Suresh12051982

    Suresh12051982 New Member


    In dec-2014 I purchased a Industry firm (Industry is registered in APIISC). THe stamp duty value of the land is 95lacs INR and we bought it for 60Lac Inr.

    I am an NRI individual living in Netherlands from Dec-2011. Now my father has heard about this and has approached his CA. Surprisingly he told I need to pay a total of 12.5lac INR now immediately or else every month a due of 25K INR will be added to the current dues.

    Seriously I don't have that much money to pay tax now. Also this is something that I/we don't know at all when we made the deal.

    Given the situation above, can you please answer the below questions for me,

    1) Do i have to pay this tax?
    2) If so, then how much time I have to pay this?
    3) can the expenses like stamp duty can be exempted from this capital gain?
    4) I didn't receive any intimation from tax office so far. Nothing is there in my tax website as well.
    I have been filling IT returns normally for the rent I am getting in India

    5) What are the consequences if I don't pay this? Seriously I can't afford this now.

    Please share your advice.

  2. Karan Batra

    Karan Batra Well-Known Member

    Hi Suresh

    I see that you have purchased a property below the circle rate and in such cases - tax would be levied on the difference amount.

    However, this amendment was introduced in 2013 and is not applicable on you as you had purchased it before 2013
  3. Suresh12051982

    Suresh12051982 New Member

    Hi Karan,

    I have bought the property in Dec-2014. But this sounds crazy to me. When there is no physical money earned how can this be treated as my income? Asking for tax when I gain by selling it makes sense, because I gained money by the deal.

    Please share yor advice
  4. Karan Batra

    Karan Batra Well-Known Member

    If you have purchased the property in 2014- then the difference in the circle rate and your purchase price would be considered as your profit and you would be liable to pay tax on the same.

    It is hard for the govt to imagine that a deal has happened below the circle rate as that rarely happens. Therefore, the govt in such cases assumes that the transaction has been under-reported and therefore levies a tax on the buyer.

    If you think the transaction has not been under-reported, you can get it valued by a valuation officer and in case the value is less than the price at which you bought - you wont be required to pay tax
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