Kanishk had purchased a House Property in Delhi on 12.01.2013 for ₹17,40,000. He sold this house to his friend Suresh on 21.03.2021 for a consideration of ₹35,00,000. He paid brokerage @ 2% on the sale price. On the date

Computation of Capital Gain in the hands of the Kanishk for AY 2021-22 Particulars Amount Sales Consideration received or accruing as a result of transfer (Working Note 1) 35,00,000 Less: Brokerage @ 2% of ₹35,00,000 (70,000) Net Sale Consideration 34,30,000 Less: Indexed cost of acquisition (₹17,40,000 * 301/200) (26,18,700) Long-term capital gain 8,11,300 Tax Treatment in the hands of the buyer Suresh: As per section 56(2)(x) of the Income tax Act, 1961, where any person receives from a non-relative, any immovable property for a consideration which is less than the stamp duty value on the date of agreement or date of registration as the case may be, and the difference between actual consideration and stamp duty value so considered is more than the higher of ₹50,000 or 10% (amendment by Finance Act, 2020) of the consideration so received, then the difference between such value and actual consideration of such property is chargeable to tax as income from other sources. Since the difference of ₹2,25,000 (37,25,000 - 35,00,000) is not more than ₹3,50,000 being higher of ₹50,000 or ₹3,50,000 (10% of 35,00,000), no income would be chargeable to tax as income from other sources in the hands of Suresh. Working Note 1: Where the date of registration and date of agreement are not the same and part or whole of the consideration is paid by way of A/c payee cheque or A/c payee bank draft or by use of ECS on or before the date of agreement, then stamp duty value on the date of agreement may be taken for the purpose of determining income taxable under the head "Income from other sources". In the present case, Suresh has paid 20% of the consideration by way of A/c payee cheque, the stamp duty value on the date of agreement has to be taken. Working Note 2: As per section 50C of the Income tax Act, 1961, where the consideration received or accruing as a result of transfer of land or building or both, is less than the value adopted or assessed or assessable by the stamp valuation authority, the value adopted or assessed or assessable by the stamp valuation authority shall be deemed to be the full value of consideration received or accruing as a result of transfer. Further, where the stamp duty value on the date of agreement or registration, as the case may be, does not exceed 110% (amendment by FA 2020) of the amount of actual consideration received or receivable then the consideration so received would be deemed to be the full value of the consideration. In the present case, since Kanishk has received 20% of the consideration by way of A/c payee cheque on the date of agreement, the stamp duty value of ₹37,25,000 on the date of agreement would be taken for the purpose of computing full value of consideration. Further, since the stamp duty of House Property is ₹37,25,000 does not exceed ₹38,50,000 i.e., 110% of 35,00,000, the consideration received i.e., Hence Actual consideration 35,00,000 in respect of House Property would be deemed to be the full value of consideration.