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NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Income from Other Sources

Mr. Kapoor, a resident individual, purchased a residential flat from an unrelated seller for Rs 50,00,000 when the stamp duty value was Rs 54,00,000. Under the stamp duty value rule for immovable property purchased for inadequate consideration, what amount is taxable in his hands as Income from Other Sources, assuming the tolerance limit is 10% of consideration?

Nothing is taxable. The difference of Rs 4,00,000 between stamp duty value and the price paid is within the 10% tolerance of Rs 5,00,000, so the provision does not apply. Had the difference exceeded the tolerance, the whole difference would have been taxed.

  1. ANilCorrect
  2. BRs 4,00,000
  3. CRs 54,00,000
  4. DRs 5,00,000

Explanation

Difference between stamp duty value and consideration is Rs 4,00,000. The tolerance is 10% of Rs 50,00,000, which is Rs 5,00,000. Since the difference is within the tolerance, no amount is taxable. Taxing Rs 4,00,000 would ignore the tolerance band.

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