Sale deed executed between husband and wife for no consideration.
I had taken a property in 1995 and had only GPA and sale agreement, I registered the same in the form of Absolute Sale deed to my Wife in year March 2014 at zero cost. No cash transaction either mentioned in deed or done.
Since the lawyer suggested Sale deed, I had paid full registration and stamp duty charges.
Now Income tax has issued a notice that I have to pay tax under section 50 C. If I have not received any income at all the how can income tax be applicable?
What should be the response given to Income tax department.
Asked 1 year ago in Capital Gains Tax from Bangalore, Karnataka
Yes you need to explain the same to IT officer with proof and with advocate letter confirming the same. If the Officer understands it then no problem.
Let me tell you very frankly that you have made a blunder by transferring the property at zero cost to your wife.
Income tax department can demand tax from you on the fair market value of the property.
Please feel free to call/revert in case of any doubts
Thanks and Regards
CA CS B.com
From AY 2017-18 If date of agreement and registration is not same then and stamp duty value as on date of agreement can be considered provided consideration or part thereof received by account payee cheque before such agreement.
In your case transaction entered before amendment you take advantage of following ruling.
CIT Vs S Venkat Reddy (2013) (Hyd)
ITO Vs Modipan Ltd (2015) (Delhi)
CA, Greater Mumbai
Can you argue based on the following point.
Section 56(2)(vii)(b)- Taxability of Immovable property received for inadequate consideration
? Where any immovable property is received for a consideration which is less than the stamp duty value by an amount exceeding fifty thousand rupees, the stamp duty value of such property as exceeds such consideration shall be chargeable to tax in the hands of an individual or HUF as income from other sources.
? This section is not applicable, where the property is received without consideration from relative or on account of marriage, etc.
Asked 1 year ago
Also as per my previous view in the sale deed if you have not mentioned any amount then you need to explain the IT Officer and try to convince him regarding the same. If he dont then let him pass the order and you can go in appeal against the said order.
It is always better to hire a Consultant/CA for this purpose in your area who knows the officer well to make settlement.