Photo: iStockUnder income tax laws, if land or building is sold at a price of less than the stamp duty valuation of such land or building, the seller is taxed on a notional basis on the capital gain by taking the stamp duty valuation as the sale price, instead of the actual agreement value. Not only that, the purchaser is also taxed on the same difference between stamp duty valuation and agreement value as his income from other sources. In such cases, are the purchaser and the seller liable to pay tax on the difference between the actual price and stamp duty valuation? If one looks at the provisions of the law, it refers to immovable property, being land and building or both. The new purchaser cannot, however, take the stamp duty valuation on the date of the original agreement for purchase between the original purchaser and the builder, since he was not a party to that agreement.

Source: Mint September 27, 2018 04:18 UTC