MD ASIF & ASSOCIATES

6, TILJALA L ANE ,4TH FLOOR,

Kolkata 700039
Email : mailasifali@gmail.com
MB : 9339259009
Chartered Accoutnants

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Date : 16th Oct 2020

Question as emailed to us on 29th Sept 2020 by Safique Sardar (safique.sardar@gmail.com)

Hello Sir,

This is to request you to please suggest and help us with the Tax planning and analysis
for a transfer of property.

We would like to purchase a property situated in Kolkata within the limits of Kolkata
Municipal Corporation.

What are the legal requirements and formalities available for both the purchaser and the
seller of a property for such transfer.

Regards,
Safique Sardar

Our RESPONSE towards the Question raised

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Seller’s Taxability
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Seller’s Taxability

If the Value of the Property being sold i.e Declared Value > Stamp duty value then the Declared Value will
be considered final Sale value for Capital Gain and Capital gain will be computed Accordingly.

If the Declared Value in Deed/Agreement is < Stamp Duty Value (SDV) then as per Section 50C Stamp Duty
value (SDV) = Sale Consideration for Capital Gains under Section 48

Wef -AY 2019-20

If SDV is > 105% of Sale value then only SDV will be considered otherwise Sale Value will be considered for
Cap gains

Relevant Section : Section 50C

 MD ASIF & ASSOCIATES
6, TILJALA L ANE ,4TH FLOOR,
Kolkata 700039
Email : mailasifali@gmail.com
MB : 9339259009
Chartered Accoutnants

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Date for Determining Stamp Duty Value

Date of considering SDV will be Dt of Agmt if any part of Advance is received by way of an account payee
cheque or account payee draft or use of electronic clearing system through a bank account, on or before the
date of the agreement for transfer

Otherwise Dt of SDV = Dt of Registration

Section 50C and double taxation shall apply on the difference in the stamp duty value and transfer price.

Tax Exemption for Seller

Period of Holding in case of Land & Builiding : 24 Months (from AY 2018-19) earlier 36 months

Capital Gain if LTCG @ 20% with Indexation benefit and if STCG (Short term capital Gain) then it will be
taxable at Slab rate applicable to Individual/HUF

Exemption from Capital Gain Tax

Capital Gain will be exempted if Sale proceeds is invested in

1. Buying another Residential property either 1 year Before or Within 2 years from the Date of Transfer. Of
2. Construct a Residential house within 3 years from the Date of Transfer.

However, from AY 20-21, if LTCG < 2 crores, then exemption is available upto Two Properties. And this
option is available once in the entire lifetime

Benefit limited to Individual and HUF only

Exemption Amount is limited to Lower of

1) Amount of Capital Gain or
2) Amount invested in New Property

Exemption withdrawn if : New House purchased /Construction if Sold within 3 years from the Date of
Purchase/ Construction

Due date of Income tax Return

If the seller fails to invest the amount before the due date of filing of Income tax return then he must deposit
the amount of Unutilised Capital gain in CGAS A/c (Capital Gain Account Scheme) Account in Authorized
Public sector bank before the due date of filing of Income tax return and information
MD ASIF & ASSOCIATES
6, TILJALA L ANE ,4TH FLOOR,
Kolkata 700039
Email : mailasifali@gmail.com
MB : 9339259009
Chartered Accoutnants

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The proof of deposit into the CGAS account should be attached along with the income tax return in order to
claim exemption from long term capital gain tax for the financial year during which the transfer was made.

Account cannot be opened in Joint Account name. Withdrawal is only permitted for utilisation as per scheme
within 60 days of Withdrawal and it cannot be re deposited

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Buyer’s Taxability
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Excess Value will be chargeable as Income from Other Sources

If the Purchaser purchase the property at the Value which is lesser than the Stamp duty value in excess of
50000 then Stamp Duty Value less Declared Value will be Taxable as Income from Other Sources u/s
56(2)(x) in the hands of Buyer

Relevant Section : 56(2)(x)

Purchased Value will now be Stamp duty value for the purpose of Capital Gains Computation in Future
(Sec 49(4)

Also in order to avoid Double Taxation, Stamp Duty value will be considered as Purchased consideration for
Buyer instead of Declared under section 49(4) henceforth for the purpose of computing Capital gain in future
(Section 48)

Relevant Section : 49(4) & 48

Disclaimer : The above Note is prepared based on analysis and investigation of relevant Acts and articles, we
have tried utmost effort in making this Note error free. However, Receiver of this information are requested
to verify the information from relevant source and experts before taking any decision on purchase or sale.

Sheikh Muhammad Asif Ali

B.Com (H) ,CA, CS,CMA(Int), NCFM