Hello,

You are not required to show such a difference amount between the market value and sale deed value as your income from other sources.

The applicable section is 56(2)(x), which says that if any person receives an immovable property for a consideration which is less than stamp duty value of the property and such excess is more than the amount of fifty thousand rupees and the amount equal to five percent of the consideration then stamp duty value of such property as exceeds such consideration shall be taxable as income in the hands of buyer and chargeable under the head Income from Other Sources.

So you just need to make sure that the sale deed/sale agreement value of the property is either equal to or more than the stamp duty value of the property.

I hope that this answer satisfies your requirements.

Regards,

CA Hunny Badlani

Market value means the circle rate?

If yes then you need to show it as income from other sources and when you sale such flat you will claim 42 lakh as your cost.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you.

Stamp duty value means any value adopted by the Government for the purpose of payment of stamp duty for the immovable property. Yes, it is the minimum value at which the property is to be registered and stamp duty is to be charged. 

If Rs. 42 Lakhs is the stamp duty value and you have paid the consideration of Rs. 37 Lakhs, then the difference amount is required to be added to your income as income from other sources. 

Kindly check the stamp duty value before making any conclusions.

If you are saying that 42 lakh is circle rate/ stamp duty value then you need to show the difference amount as your income u/s 56 or else you will have to face scrutiny in future.

- What is the circle rate/stamp duty value of the property? In West Bengal, might be it have different name. In South India it is called guidance value. Stamp duty value is the value at which property gets registered and stamp duty is paid. Under income tax, sale consideration is taken at least equal to stamp duty value for the purpose of calculation of capital gain. 

- If Rs.37 lacs is stamp duty value then no need to worry. If Rs.42 lacs is stamp duty value then Rs.5 lacs will be considered as income from other sources.

- There are many factors to be considered. For detailed discussion, please take phone consultation. 

Hi

No. The property must be registered at stamp duty or actual sales consideration, whichever is higher.

Yes, stamp duty value is a minimum guideline value or circle rate below which registration cannot be done.

Where is the market value mentioned?

If stamp duty is paid on 37 lacs by the buyer, the sales consideration for capital gain purposes shall be 37 lacs only.

Dear Sir,

Hope you are doing well !!

Where the sale consideration received or accruing on transfer of a capital asset, being land or building or both is less than the stamp duty value, then the stamp duty value (SDV) is deemed to be the sale consideration. How-ever, where the assessee claims that the SDV exceeds the fair market value of the property, the Assessing Officer may refer the valuation of the capital asset to the valuation officer. Hence for the purpose of computing capital gains liable to tax, you must consider the SDV or fair market value, whichever is higher.

What is the FMV of property?