As per S/50C and/or S/56 (2) (vii) (b) of the Income Tax Act, 1961 - If Stamp duty value of an immovable property is higher than the Agreement value than For Seller - The stamp duty value is to be considered as the consideration value.
Similarly, in such a case as per S/69 of the Income Tax Act, 1961 - The difference between the Stamp duty Value and the Agreement Value would be considered as Income from Other Sources in respect of the Buyer.
Kindly provide your opinion as to:
1) Whether the above understanding is correct?
2) Whether the above understanding would be applicable in case of Transfer of Tenancy? - i.e. Whether Immovable Property would cover Transfer of Tenancy?
Income Tax Act Sections 50C, 56(2)(vii)(b), and 69: Clarification on Tenancy Rights Transfer and Stamp Duty Consideration A query was raised regarding the application of Sections 50C, 56(2)(vii)(b), and 69 of the Income Tax Act, 1961, in the context of transferring tenancy rights. It was questioned whether the stamp duty value should be considered the consideration value if it exceeds the agreement value, affecting both sellers and buyers. Specifically, the inquiry sought clarification on whether the difference in these values should be treated as 'Income from Other Sources' for the buyer and if these provisions apply to the transfer of tenancy rights, considering whether such rights qualify as immovable property under the Act. (AI Summary)
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