Summary: i) My mother bought a plot in 1998 on GPA. ii) She registered this plot on my name 2 years back. In registry its stated that currently the plot has been evaluated for 18 lacs as per rates and is being sold for a sum of 9 lacs (paid by me- 2nd party to my mohter- 1st party during registration), and this amount has already been paid to the principle back in 1999 by my mother. iii) This is not a gift deed as my mother was holding a valid GPA, but not a registry. 1) I want to understand my & my mother's current tax liability and computation based on above transaction. 2) Also, my tax liability if I sell this property for 7 lacs, i.e., for amount less than circle rate. Your valuable inputs are highly appreciated. Thanks in advance.
Hi,
In case of your mother.
- If the registry was done on Rs.9 lacs and stamp duty was paid on Rs. 9 lacs then sale consideration will be Rs. 9 lacs irrespective of the fact that figure of Rs. 18 lacs is written in the sale deed. Cost will be indexation of 9 lacs.
In your case
- Usually stamp duty is paid on circle rate therefore minimum circle rate is considered as sale consideration. If you pay stamp duty on 7 lacs then it will be considered as sale consideration.
Thanks
Since the circle rate of land was 18 lakh and you made the sale deed for 9 lakh so your mom need to show sale consideration as 18 lakh and pay tax accordingly and since you have purchased it for less than circle rate you will also have to pay tax on same u/s 56.
Also when you sell the property for less than circle rate the circle rate would be considered as your sale value and not 7 lakh.
What is GPA?
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Thank you
Hi,
Hope you are doing well !!
1. There will be no tax liability on your mother.
2. Circle rate should be considered as sales value.
However, you can pay the stamp duty on circle rate & show the market value in sales deed.
