Rukumar (No) 20 October 2010

Income tax

I Constructed House by taking Housing Loan of Rs 9 lacks.

I sold that house to my Father for Rs 9 lacks. with this amount of Rs 9 lacks i paid the loan amount.

My question is on this 9 lacks rupees, do i need to pay Income tax? If yes then how much?

My gross salary is 5 lacks per annum.

regards

Rupkumar

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3 Replies

Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 ) 22 October 2010

No need to pay any tax on it. Any profits or gains arising from the transfer of a capital asset effected in the previous year shall be chargeable to income-tax under the head "capital gains", and shall be deemed to be the income of the previous year in which the transfer took place.

Rukumar (No) 22 October 2010

Thank you very much Adv.Ramachary Sir for your very valuable advice.

Regards

Rupkumar.

sathikonda (Tax Consultant) 02 November 2010

Mr.Rukumar

and

Mr.Ramachary

The cost of the asset sold is Rs.9 lakhs. But as per the provisisons of section 50C of Income-tax Act, 1961 the value adopted or assessed by any authority of State Government - Registration and Stamp Duty Authority - shall be deemed to be the full value of the asset transfered. In the present case if the value adopted or assed by Registration and Stamp Duty Authorities is more than the cost of the asset i.e. Rs.9 lakhs, the amount over and above the said Rs.9 lakhs shall be deemed to be gains derived on the transfer of the property. Hence please be sure whether the value adopted by the Registration and Stamp Duty Authorities is the same value equqal to the cost of construction i.e. Rs.9 lakhs. If the value is more than the said amount the excess amount of value shall be the capital gains in this case.

Best Wishes

Sathikonda