sale of property under reservation
Querist :
Anonymous
(Querist) 31 March 2011
This query is : Resolved
I had purchased a plot Twenty years back. Subsequently, majority of this was shown under reservation for construction of Road, in Proposed Development plan of Municipal Corporation. As a result, neither they allow me to carry out any construction nor nobody was ready to buy the same. Their policy for compensation is not clear. Whether they are going to give the Transfer of Residence (TDR) or Cash or anyother method. Even if they do so, we do not know as to when ,how much, what will be the expenses involved for getting the TDR and what will be the price of such allotted TDR, after allotment to us. Everything is Uncertain and in limbo.
However one of the builders has agreed to buy this plot with knowledge of Reservation. However, he has agreed to pay the price which is much lower than govt.’s Ready Reckoner (So called market) price Applicable to OPEN CLEAR PLOT WITHOUT ANY RESERVATIONS, though he has agreed to pay stamp Duty at the Ready Reckoner price.
Considering the above facts and my age (70+), I would like to get rid of the liability and get the money for our old age.
But I would like to work out the Long Term Capital Gain Tax on Sale price and not on Ready Reckoner price.
Please let me know whether the Income Tax authorities would accept this and is there any clause under Income Tax law, for representing the above case.
Thanks and regards.
soumitra basu
(Expert) 15 April 2011
According to section 50 C of the income tax act the capital gain shall be calculated on the basis of the value adapted by the registering authority for the purpose of stamp duty. You may dispute the same by taking plea that one valuation officer should be appointed and correct valuation should be taken. The valuation adapted by the valuation officer is binding both on you and the income tax authority.
