Capital gains
sarmaavnhs
(Querist) 30 January 2015
This query is : Resolved
Hello Sir...
I am a salaried middle class employ paying tax at TDS and filing returns regularly. Now my wife got a site from her parents and it was registered in her name. Recently it was sold according to the market rates. She got a substantial amout. What kind of investments she can do to reduce or avoid tax? As every body knows she got some amount according to the market rate beyond registration values... What she can do?
P. Venu
(Expert) 31 January 2015
You require the services of a tax planner/CA than the advice from a lawyer.
Anirudh
(Expert) 31 January 2015
Dear Mr. Sarmaa,
It is not clear what you want to say when you say: "she got some amount according to the market rate beyond registration values".
First please indicate whether she got the entire consideration only by means of cheque or cheque + cash.
Whether only the cheque amount has been shown in the Sale Deed or the cash amount also.
Whether the consideration shown in the Sale Deed is exceeding Rs. 50 lakhs or not.
On what date your father in law purchased the site.
What was the price paid by your father-in-law (as mentioned in the purchase agreement) + what was the stamp duty paid by your father in law at the time of purchase.
On knowing the above information, I will answer your query.
Guest
(Expert) 31 January 2015
Well Advised by Expert Mr.P.Venu.You could consult the CA Club of the Same Forum Whose E Mail Id is just below in this Thread.
sarmaavnhs
(Querist) 31 January 2015
Dear Sri Anirudh garu...
Thanks for your answer. The buyer is going to register the site with lower rate per yard and gives the amount by cheque. He will give the remaining amount by cash. Both the amounts are not exceeding 50 lacs individually. The site belongs to my mother-in-law which was given to her by her father as a gift. she allotted a part of it to my wife by her will. The property is nearly 100 years old. My wife got it registered on her name nearly 2 years back.
thaking you,
sarma
Anirudh
(Expert) 31 January 2015
You have to check up whether there is any guideline value / circle rate prescribed for the area in which the land is situated for the purpose of stamp duty.
If such a guideline value / circle rate is prescribed, then if the Sale consideration is shown in the Sale Deed less, but stamp duty is paid as per Guideline value/Circle rate, PLEASE NOTE THAT ONLY THE GUIDELINE VALUE / CIRCLE RATE (and not the lesser consideration shown in the Sale Deed) will be taken into account for working out the Capital Gains as per Income Tax Act.
Showing in the Sale Deed lesser consideration than the prescribed Circle rate/Guideline value, will also not help the buyer. This is because, the difference between the value adopted for stamp duty and the consideration indicated in the Sale Deed will be treated as 'income from other source' in the hands of the buyer and on that income from other source, it will be taxed in the hands of the buyer.
Dr J C Vashista
(Expert) 01 February 2015
Very well explained and advised by expert Mr. Anirudh,I appreciate.
The consideration amount endorsed in the Sale Deed shall attract stamp duty as well as tax calculation.
Rajendra K Goyal
(Expert) 01 February 2015
Facts not given in detail. Consult your tax consultant.
T. Kalaiselvan, Advocate
(Expert) 01 February 2015
Though expert Mr. Anirudh has given a satisfactory opinion to the author, the author seems not satisfied, let him approach an auditor for further issues.
