As per the Income Tax provision you are also liable to pay tax on 30,00,000/- considering same to be your notional income which department assumed to be paid by your mother to your father real nephew. And hence you need to pay tax on the same as notional income.
Property related income tax
Dear Sir, My mother bought a property(agricultural land under municipal corporation) from my fathers real nephew for Rs. 40 lakhs but the market value for the property as per government guidline is Rs. 70 lakh. My mother has paid the stamp duty according to the market rate of the property i.e. for 70 lakh which is mentioned on the registry paper. Now kindly tell that my mother is liable for any taxes or not for this property(specially the taxes considered for the difference amount i.e. 7000000 - 4000000 = 3000000 ) ?
Asked 7 years ago in Income Tax
Dear Sir,
Yes, your mother has to pay taxes on the differential amount of INR 30 lacs.
It will be treated as gift. However, if you can prove that fair market value of the property is only 40lacs, there is a trying case for not treating the difference as gift.
Please feel free to call/revert in case of any doubts
Thanks and Regards
Abhishek Dugar
CA CS B.Com
Yes your mother is liable to pay tax on the difference amount U/s. 56(2)(vii)(b) of the Income Tax Act,1961, Under other sources of Income.
Hi,
As your mother has purchase the property,it amounts to investment , so she is not required to pay any taxes.
It might be possible that your father's nephew is required to pay capital gain tax. if the land is not qualifying as agriculture land 's all conditions.
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