Capital Gains in Sale of Residential Plot w.r.t. Section 54? Please Advice

Sir, For Sale of Residential Plot: Details are provided below.

3 years ago I purchased plot for 13.5 lacs. I paid payments thru Cheque and have receipts & sale agreement for 13.5 lacs. But the Developer has Registered the Plot for Stamp Duty Value 2.5 lacs though the sale agreement was for 13 lacs. I paid stamp duty & registration charges on 2.5 lacs registered value.

Now I am selling the plot for 11 Lacs by Cheque and 2 Lacs by Cash. The new buyer also want to Register the plot for 2.5 lacs and pay Stamp Duty & Registration charges for 2.5 lacs. But he shall be giving me 11 Lacs Cheque and 2 Lacs Cash. There is no agreement except email communication as the Buyer is staying in abroad.

My Queries are:
1. For calculating Indexed Cost of Acqusition What is the Base at the Time of Purchase for Tax Calculation? Sale Agreement Value OR Sale Deed Value? 2. For Amount Received, Can I invest Capital Gains in Capital Gains Exemption Bonds of NABARD, NHAI or REC as Per Section 54EC? 3. What are the Tax Implications? So that I can Plan accordingly. Kindly Advice me.

My email [email protected]

Thank you.

Manjula [email protected]

asked Feb 16 '12 at 10:04 by mmanjula100 1112


Registered deed value would be considered for long term capital gain computation both for purchase and sale.

So on papers you have no gains as selling and purchasing price was same. In fact by indexation method, it would be a capital loss.

However as you are getting amount by cheque for a high value. It may be reported by bank to IT department. IT department may thus raise a query on this transaction and ask you to clarify same.

There would also be issue if you show actual amount in IT returns as in that case they may be charges of not paying government stamp duty fully.

I would advise you to take full caution on this transaction and consult a tax professional expert in property matters.

answered Feb 16 '12 at 22:42 by Pankaj Batra 5.2k320

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Asked: Feb 16 '12 at 10:04

Seen: 2,096 times

Last updated: Feb 22 '12 at 18:34