Agreement price & stamp duty

Flat agreement price & stamp duty diff can’t be taxed: ITAT, MUMBAI – In a relief to a non-resident taxpayer who had bought an apartment in a posh suburb of the city, the income-tax appellate tribunal (ITAT), Mumbai bench, held that Rs 55.9 lakh, the difference between the flat’s agreement value and the stamp duty value on the date of registration, cannot be taxed in her hands as ‘income from other sources’.

Flat purchases involve an agreement, payments, and later registration with potentially higher stamp duty. Tax issues arise if officials consider the value difference as taxable income, addressed by Section 56(2)(vii)(b) or now 56(2)(x).

A recent ITAT order, relevant to the amended law, considers stamp duty value on the agreement date for payments via banking channels. In a case with a non-resident taxpayer facing a Rs 55.9 lakh tax demand, the ITAT ruled in favor, accepting the booking form as evidence. It emphasized banking transactions and a higher purchase consideration than stamp duty value. The taxpayer’s evidence countered the tax officer’s claim, resulting in the ITAT decision.

Disclaimer: Content taken from Times Of India.