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CMA Intermediate · Direct and Indirect Taxation · Income from Other Sources

Arjun bought a plot of land for Rs. 8,00,000 from an unrelated seller. The stamp duty value on the transfer date was Rs. 9,00,000. What amount is taxable in Arjun's hands under section 92(2)(m)?

Rs. 1,00,000 is taxable. The excess of stamp duty value over consideration is Rs. 1,00,000, which exceeds the higher of Rs. 50,000 and 10% of consideration (Rs. 80,000), so the full excess is chargeable under section 92(2)(m)(ii)(B).

  1. ARs. 1,00,000
  2. BNilCorrect
  3. CRs. 9,00,000
  4. DRs. 20,000

Explanation

For immovable property bought for a consideration, the excess of stamp duty value over consideration is taxable only if it exceeds the higher of Rs. 50,000 or 10% of consideration. Excess = 9,00,000 - 8,00,000 = Rs. 1,00,000. 10% of consideration = Rs. 80,000, which is higher than Rs. 50,000. Since 1,00,000 exceeds 80,000, the excess Rs. 1,00,000 is taxable. Hence the key is Rs. 1,00,000 not Nil.

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