Question

Mr Manish has purchase urban land for his friend of for Rs 250000 the market value of the land and land is the 370000 and the stamp duty value of the set land is 150000 what will be the taxable amount of the land of Mr Manish under section 56 of the Income Tax Act 1961

Answer 1

The answer for this should be NIL.

But there is no option here.

Since Mr. Manish purchased the land for a value more than the Stamp Duty value, there is no question of adequate consideration which can be treated as gift.

If he had purchases for a value less than stamp duty value , say for example, 1,00,000. Then it can be said that Manish had purchased the land for inadequate consideration.

Then taxable value under Sec 56 will be

( stamp duty value - purchase value)

(Rs.1,50,000 - Rs.1,00,000)

Rs.50,000