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Real Estate Price within 5% of
Circle Rate is allowable without any Income Tax Adjustment

By CA Ankit Gulgulia (Jain)

In Current Scenario where the Transaction Prices of Real Estate
Transfer was below the Circle Rate, the Differential would require the tax sufferance. 

Now It is amended that where the Real Estate Transaction Price is within 5% of
Circle Rate, there shall be No Adjustment for Tax Purpose.

Hence Simultaneous Amendment to Section 43CA (PGBP), 50C
(Capital Gains) and 56(2) (Income From Other Sources ) have been made as under.


43CA – Insertion of Proviso
“Provided
that where the value adopted or assessed or assessable by the authority for the
purpose of payment of stamp duty does not exceed one hundred and five per cent.
of the consideration received or accruing as a result of the transfer[a1] ,
the consideration so received or accruing as a result of the transfer shall,
for the purposes of computing profits and gains from transfer of such asset, be
deemed to be the full value of the consideration.”;
50C – Insertion of Proviso
“Provided
also that where the value adopted or assessed or assessable by the stamp
valuation authority does not exceed one hundred and five per cent. of the
consideration received or accruing as a result of the transfer, the
consideration so received or accruing as a result of the transfer shall, for
the purposes of section 48, be deemed to be the full value of the
consideration.”.
56(2)(x) – Amendment
in sub-clause (b), for item (8), the following
item shall be substituted with effect from the 1st day of April, 2019, namely.
8) for a consideration, the stamp duty value of
such property as exceeds such consideration if the amount of such excess is
more than the higher of the following amounts, namely
1)                 
the amount of fifty thousand rupees; and
2)                 
the amount equal to
five per cent. of the consideration:

In
the fourth proviso, in clause (IX), after the words, brackets and figure
“clause (1) or”, the words, brackets and figures “clause (iv) or
clause (v) or” shall be inserted

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