2 Strategies to Tackle Scrutiny When Stamp Duty Valuation u/s 50C of Your Property is Much Higher Than Actual Value?

The stamp duty valuation of an immovable property is done by the state government and usually accepted by the parties to a sale transactions. But the impact of stamp duty on property affects both buyer and seller. Buyer of the property, if Individual or HUF, is now affected due provision under section 56(2)(vii) of the Income Tax Act. Then seller is affected by section 50C of the Income Tax Act under which the stamp duty is taken as deemed sale consideration for computing the long term capital gain on sale of house property or other immovable properties.The problem is real for honest taxpayers because most of the state governments have also made rules of fixing stamp duties  based on the area and not on actual assessment of the fair market value of the property.

So , let us face it. There is a central law u/s 50C and there is stamp valuation of properties. We have to abide by the law . So , following strategy can be adopted to legally lessen the impact of the unsavory provision under Income Tax Act .

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