Buying property

If one buys a property and the stamp duty is paid according to the circle rate but the amount paid to the owner is less than the amount as per the circle rate with the consensus of the owner. what are the legal consequences and taxation liability for this transaction.

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R.Ramachandran (Advocate) 31 July 2018

1. The stamp duty value will be considered as the full consideration for the purposes of Capital Gains Tax in the hands of the Seller.

2. The difference between the Stamp duty value and the actual consideration will be treated as "INCOME FROM OTHER SOURCES" in the hands of the buyer, and income tax will be charged accordingly.