Raj sold a vacant land for ₹8 lakh to Mukesh on 5th December, 2022. The guideline value of the land was ₹9,60,000. Raj and Mukesh are not relatives. What is the tax implication of the transaction in the case of Raj and M

CS Executive · Tax Laws · PYQS · June 2023
Raj sold a vacant land for ₹8 lakh to Mukesh on 5th December, 2022. The guideline value of the land was ₹9,60,000. Raj and Mukesh are not relatives. What is the tax implication of the transaction in the case of Raj and Mukesh under the Income Tax Act, 1961?
(A) ₹9,60,000 will be taken as deemed sale consideration in the hands of Raj and ₹1,60,000 is taxable under section 56(2) of the Income Tax Act, 1961 in the hands of Mukesh
(B) ₹9,60,000 will be taken as deemed sale consideration in the hands of Raj. ₹1,10,000 is taxable under section 56(2) of the Income Tax Act, 1961 in the hands of Mukesh
(C) No amount will be taken as deemed sale consideration in the hands of Raj but ₹1,60,000 is taxable under section 56(2) of the Income Tax Act, 1961 in the hands of Mukesh
(D) No tax implication in the hands of both Raj and Mukesh

Answer & Explanation:

Correct Answer: Option (A)

Official answer key: (A).

Topics: Income Tax Act, 1961

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