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CA. PRAMOD JAINCA. PRAMOD JAINFCA, FCS, FCMA, DISA, MIMAFCA, FCS, FCMA, DISA, MIMA

LUNAWAT & CO.LUNAWAT & CO.Chartered AccountantsChartered Accountants

Immovable PropertiesImmovable Properties

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Section 194-IA

Section 56 (vii)(b)Section 56 (vii)(b)

Section 54 / 54F

USEUSELunawat & CoLunawat & Co..

Income Tax

Salary

House Property

Others

Wealth Tax

Service TaxHouse Property

PGBP

Depreciation

Other Source

Service Tax

House Tax

Local Issues & Taxes

DISPOSEDISPOSELunawat & CoLunawat & Co..

Income Tax

PGBP

Others

Service Tax

Capital Gain

Other Sources

Local Issues & Taxes

DisposalDisposalLunawat & CoLunawat & Co..

Section 45

Section 50C

Section 43CA

Section 194-IA

Section 54 / 54EC / 54GB

Section Section 50 C50 C� Value for the purpose of stamp duty,

deemed to be the full value of the consideration from transfer of the capital asset for calculating capital gains

� Applicable in the case of seller of a capital asset being land &/or building.


asset being land &/or building.

� Can the assessee contend that actual value of property is less than stamp value?

� Is yes, what should be done?

� In case the value is disputed before the AO and the stamp duty valuation has not been disputed; the AO may refer to a Valuation Officer for ascertaining FMV

Reference to DVOReference to DVO� Can be made for purpose of ascertaining

FMV for Capital Gain u/s 50C (section 55A)

� Earlier could be referred only when value claimed is less than its FMV.

� W.e.f. 01.07.2012 it can be referred to DVO if the value claimed is at variance with FMV


if the value claimed is at variance with FMV i.e., in case of claim of higher FMV also.

� No reference to DVO, if sale value is higher than stamp duty valuation

� Full value of consideration u/s 48 cannot be construed as fair market value as per s. 55A – ACIT vs. Prakash Ratanlal Sheth [2012] 53 SOT 378 (AHD)

Immovable Property PGBP?

� ABC Builders P. Ltd sold property (held as stock in trade) in July 2013 for Rs. 60 Lacs (Stamp Value 100 Lacs) ??

� Section 43CA by Finance Act 2013

XY Properties Ltd. is recognising revenue


� XY Properties Ltd. is recognising revenue on percentage of completion method. When sale consideration is substituted by stamp duty valuation, how would the business income be calculated????

CG?

� For builders when stamp value is more than sale consideration, can AO reject books of A/cs???

� No

A sold jewellery worth Rs. 2 crs costing


� A sold jewellery worth Rs. 2 crs costing 25 Lacs 10 years ago. Invested 2.25 in constructing residential house. � Deduction available under which section?

� Is deduction available when house is not completed within 3 years?

� Y es - CIT vs. Sri. Sambandam Udaykumar [2012-ITRV-HC-KAR-050]

Section 56� If individual or HUF receives any

immovable property without consideration, the stamp value of which exceeds Rs. 50000/- s. 56 (2)(vii)(b)

� Inadequate consideration withdrawn


� Inadequate consideration withdrawn w.e.f. 1.10.2009 . Re-introduced by Finance Act, 2013 w.e.f. AY 2014-15

� If date of agreement and registration is different – must pay some part of consideration on or before agreement date by other mode than cash

Section 56 ?? -1� A buy commercial property at Mumbai for 30

L (stamp value 30.50 lacs) and residential property at Gurgaon for 20 L (stamp value 20.50 Lacs)??

� No

� A buy Shares of listed Co for 5 L (FMV 5.5 L) &


� A buy Shares of listed Co for 5 L (FMV 5.5 L) & jewellary for 3 L (FMV 3.50 L)??

� Yes

� B buys agricultural land at Rajasthan for 10 Lacs (stamp value 25 L)??

� No

� C buys shop at Delhi from D (his relative) for 50 L (stamp value 75 L)??

� No

Section 56 ?? -2� ABC P. Ltd buys residential flats for its

employees at Jammu for 300 L (stamp value 340 lacs)

� No

� A receives a flat (stamp Value 10L) on the occasion of marriage of his daughter from his


occasion of marriage of his daughter from his employers ??

� Yes, Rajinder Mohan Lal vs. DCIT [2013] 36 taxmann.com 250 (P&H)

� B receives a property (stamp value 200 L) from ex- husband pursuant to divorce agreement after 3 years of divorce in lieu of relinquishing all her past and future claims??

� No, ACIT vs. Meenakshi Khanna [2013] 34 taxmann.com 297 (Delhi - Trib.)

Section 56 ?? - 3� A purchases a residential flat from DLF:

� Agreement date – 17.11.13 - Price – 75 Lacs

� Stamp Duty value on 17.11.13 – 75.50 lacs

� Date of registration – 17.12.14

� Stamp Duty Value on 17.12.14 – 90 Lacs

� Payment made:


� Payment made:

� 18th November 2013 – 2 Lac; 15.12.14 – 73 Lacs

� Is there any income in hands of A? If yes how much? In which year taxable?

� Yes ; 15L, AY 2015-16

� How much is the income in hands of DLF?� 90 (43CA)

� Would there be any difference if 2 Lac is paid on 17.11.13?

� Yes; A nil, DLF 90

TDS on Immovable Property� Effective from 1st June 2013 – s. 194-IA

� Applicable on purchase of land or building (except agriculture land) if consideration is Rs. 50L or more

� Tax @ 1% (20% in no PAN) – on


� Tax @ 1% (20% in no PAN) – on payment or credit whichever is earlier

� Payer need not obtain TAN – deposit TDS in challan-cum-statement in Form 26QB. To issue TDS certificate in downloaded Form 16B within 15 days from due date of deposit.

Procedure for deposit of TDS


Log on to tin-nsdl.com - Click -TDS on Sale of Property

Click & Fill online Form 26QB for payment of TDS on Sale of Property

On clicking proceed button –PAN would be verified

After confirming take printout of Acknowledgement

Deposit the tax through bank –online or electronically

TDS ??� A purchase commercial property situated at

Mumbai from B being Non Resident for Rs. 55 Lacs in May 2013. Is 194-IA applicable?

� No, but 195 applicable

� X purchases property from B situated at Delhi for Rs. 45 L in October 2013, though stamp duty value is Rs. 52 Lacs.??


duty value is Rs. 52 Lacs.??� NO, stamp duty not relevant

� A pays Rs. 30 Lacs as advance money for property value of Rs. 75 Lacs, which is forfeited – s.51 applicable??

� Yes

� R pays Rs. 55 L for commercial property out of which Rs. 10 L is for furniture??

� No

TDS ??� A purchases commercial property situated at

London from B being a resident for Rs. 55 Lacsin July 2013. 194-IA applicable?

� Yes

� DMRC acquires land of A situated in Delhi for Rs. 45 Lacs. What if consideration is 51 Lacs?


Rs. 45 Lacs. What if consideration is 51 Lacs?� No, 194-LA applicable

� A purchases flat for Rs. 60 L from B vide agreement dated 1.03.13. Registration done on 30.5.13, payment on 30.06.13??

� A does not maintain books of A/cs� Payment basis

� A maintains books and credited B on 1.3.13� Credit basis

TDS ??� A purchase Flat X from B for Rs. 30 L and

purchases Flat Y from B for Rs. 40 L in July 2013. Is 194-IA applicable?

� No, each property separate

� ABC P. Ltd. dealing in properties buys one flat from a Builder for Rs. 10 Crs in July 2013. Is 194-IA applicable??


194-IA applicable??� Yes

� A, a salaried employee buys office for Rs. 1.5 Cr in instalments. Pays 4 instalments before June 13 & rest after June 2013??

� Applicable for payment after June

� A pays an instalment of Rs. 60 L in November 2013 which includes interest of Rs. 5 L??

� Only on principle, intt if 194A

??? - 1� A entered into agreement to sell residential

flat on 15.05.13 with B for Rs. 1 Cr. B paid Rs. 60 lacs on same day and balance on 18.7.13 the date of registration. Circle rate - 1.25 cr.

� Is B liable to deduct TDS on Rs 40 lac on 18th July 2013 ?


2013 ?

� Yes

� Is B also liable to deposit TDS on difference of circle rate? If Yes, who will pay TDS?

� No

� What is CG in hands of A when he had purchased this flat on 15.01.2008 for 80 L?

� 45 L – 50C

??? - 1� What is effect of Rs 25 lac being the difference

in sales consideration and value as per circle rate in income tax in the hand of A and B ?

� A u/s 56, B u/s 50C

� What is the remedy available to A or B to save tax on Rs 25 lac being amount of difference in


tax on Rs 25 lac being amount of difference in sales consideration and value as per circle rate

� Contest for lower value – valuation officer

� Is there any effect on taxability of income tax if A or B are in the business of real estate & the flat sale is normal course of business?

� No

� Would it be different if A & B both are Companies?� Yes only for A - 56

??? - 2� X booked flat with DLF for Rs. 70 lacs and

made payment of Rs. 25 lacs on 13.5.13. He enters into agreement on 23.11.13 with Y to sell this flat for 30 lacs and Y agreed to pay balance Rs 45 lac to DLF builders.

� Whether Y to deduct TDS on Rs 30 lacs to X?


� Whether Y to deduct TDS on Rs 30 lacs to X?

� No

� Whether Y to deduct TDS on Rs 45 lac to DLF builder? If Yes, on which amount Rs 45 lac or Rs 70 lac as X had not deduct the TDS as the payment was made before June 2013?

� 45

� What is the TDS liability on payment for parking, PLC, club membership etc to DLF?

??? - 3� A is member of the ABC CGHS. He is paying Rs

10 lac quarterly to society for flat. Rs 2.5 croreFlat cost fixed by the society subject to revision of actual cost A already paid Rs. 1.2 crup to May 2013.

� Is 194 IA applicable? If yes, on which amount?


� Is 194 IA applicable? If yes, on which amount?

� Nil mutual

� A agreed to sell two properties to B. Sales consideration being Rs. 25 lac and 30 lacrespectively � Is 194 IA applicable? If yes, on which amount?

� Nil

??? - 4� A is non-resident have factory in Okhla, Delhi

and agreed to sell the same to B for Rs. 70 lacon May 2013. B paid Rs 20 Lac to A on 15th May 2013 and final payment & registration in Feb 2014

� Whether B is liable to deduct TDS on payment of Rs.


� Whether B is liable to deduct TDS on payment of Rs. 20 Lac to A? If Yes, under which section and what is the rate of TDS ?

� Yes, 195

� A stays in India and become resident as per IT Act. B is to pay Rs. 50 Lac in Feb 2014 , Is B liable to deduct TDS in Feb 2014 on Rs 50 Lac if yes under which section?

� To see at time of payment

??? - 5� ABC Ltd is to receive Rs. 2 Crs from Mr. A

against supplies made. Mr. A instead of paying agrees to transfer his immovable property to ABC Ltd whose stamp duty value is 1 Cr. All transactions are after 1.6.2013

� Is ABC Ltd required to deduct TDS


� Is ABC Ltd required to deduct TDS� Yes, payment by any other mode

� If yes on what amount? � Depends

� On which date the liability of TDS would arise – sale or transfer?

� Transfer

� What would be the taxability in hands of Mr. A� CG

CA. CA. PramodPramod JainJain


CA. CA. PramodPramod JainJain

LUNAWAT & CO.LUNAWAT & [email protected]@lunawat.com

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© 2013 CA. Pramod Jain, Lunawat & Co. © 2013 CA. Pramod Jain, Lunawat & Co.

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