Capital gains

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Dear Sir / ma'am,

I have a specific query pertaining to capital gains after sale of immovable property, I request for suggestions from learned experts.

if government rate of property worth 2 lacs has been undersold for 1 lac, (as per sub registrar, the sale deed has to show the government rate as sale consideration amount) can the capital gains tax be paid on 1 lac. can an appeal be addressed to Income Tax department that the property was indeed sold for 1 lac and not 2 lacs. is there a provision?

thanks

[DR.MARIAPPAN GOVINDARAJAN]

In my opinion the value registered is taken into account for capital gains. This is the problem often based by the sellers who sells the property below the guideline value.In this regard I expect the views of the experts.

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Thank you Mr. Govindarajan for the reply. I request for views from experts for the query. In the event of capital loss owing to a distress sale, how to appeal to the income tax department that the property was in fact sold at a lesser price than market value and requesting for appropriate relief. Thank you.

Valuation of the property should be done from the registered valuer being as a distressed sales, if sold as such. If objected by the assessing officer, then, demand for valuation to be done from the department valuer. Also, raise objection before the stamp valuation authority regarding higher stamp duty charges. Also, produce evidence for lower rate than the rate for the purpose of stamp duty.

AI Summary

Capital gains valuation: contest guideline value with registered valuer report and objections to tax and stamp authorities
When a sale deed records a guideline value higher than the actual consideration, the registered value is commonly used for capital gains computation. Taxpayers should substantiate a lower bona fide sale by procuring a registered valuer's report showing distressed-sale circumstances, produce contemporaneous evidence of the lower consideration, and, if the assessing officer objects, expect departmental valuation and raise objections before the stamp valuation authority with supporting evidence.