CA. Tarun Ghia AHMEDABAD TAX PRACTITIONERS’ ASSOCIATION ISSUES IN PROVISIONS OF SECTIONS 50C AND...
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Transcript of CA. Tarun Ghia AHMEDABAD TAX PRACTITIONERS’ ASSOCIATION ISSUES IN PROVISIONS OF SECTIONS 50C AND...
CA. Tarun Ghia
AHMEDABAD TAX PRACTITIONERS’ ASSOCIATION
ISSUES IN PROVISIONS OF SECTIONS 50C AND 56(2) OF THE INCOME TAX ACT, 1961
ON JANUARY 31, 2010
Presentation by : CA. TARUN GHIA [email protected] [email protected] 9821345687
CA. Tarun Ghia
I. Section 50C :
Validity upheld
History and Background
Chapter XXA: 15 11 1972 to 30 09 1986
XXA proceedings started after transfer
CA. Tarun Ghia
Acquisition of immovable property
based on Fair Market Value
K. P. Varghese 131 ITR 597 (SC)
XXC : 01 10 1986 to 30 06 2002
Pre-emptive right to purchase by Govt. in
notified cities and towns
CA. Tarun Ghia
Based on monetary limits of apparent consideration
Limited application and was failing
Finance Act, 2002 introduced 50C w.e.f. 01
04 2003
Simultaneously Chapter XXC made
inoperative w.e.f. 01 07 2002
CA. Tarun Ghia
Overlapping transactions
Extends to entire country except J & K
Transactions in land and building or both
Held as capital assets
CA. Tarun Ghia
Consideration stated in instrument of transfer
vis a vis
value adopted and assessed or assessable by
stamp duty authorities
“Assessable” inserted w.e.f. 01 10 2009
CA. Tarun Ghia
Relief Provisions :
Appeal, Revision or Reference before other authority or court
Claim of lesser Fair Valuation before AO
“May” refer to Departmental Valuation Officer
Valuation Proceedings
Valuation Report
CA. Tarun Ghia
Value determined: Higher/ Lower
Valuation Report received after completion
of assessment
Coverage of term “land or building or both” :
Flats, shops, galas and other such units
CA. Tarun Ghia
Units in co-operative hsg. society or other such organisations
Development rights
Tenancy rights
Booking right in a unit
CA. Tarun Ghia
For Builders and developers
Stamp duty paid by Purchaser : Locus of
Vendor
Can sec. 50C be applied to purchaser ?
Effect on exemption provisions
Section 50C vis a vis sections : 45(2), 45(3), 45(4), 50, 50B
CA. Tarun Ghia
II. Section 56(2) :
Abolition of Gift Tax Act, 1958 in 1998
Due to very poor collection under that Act
Proposal to include gifts in the Income Tax
Act
Gifts in the hands of donee
CA. Tarun Ghia
Continuing exemption to gifts from Non residents
Proposal was not enacted
Gifts became tax free
Introduced by Finance (No.2) Act, 2004
By insertion of clause (v) in section 56 (2) and
(xiii) in 2(24)
CA. Tarun Ghia
Limit per donor Rs.25000 per previous year
No provision about aggregation of such
gifts
Taxation Amendment Act, 2006 inserted
clause (vi) for aggregation
Gifts received on or after 01 04 2006
CA. Tarun Ghia
if aggregate in a previous year exceeds Rs.50000/-
then such gifts are income
Position prior to Finance (No.2) Act, 2009:
Receipts without consideration by
Individual or HUF
CA. Tarun Ghia
Can a company receive gift ?
Sum of money : connotation
from non –relatives taxable
Gifts from relatives not taxable ?
CA. Tarun Ghia
Exceptions:
From relatives
On occasion of marriage
Under a will or by inheritance
In contemplation of death of payer
From local authority ref sec 10(20)
Institution etc. registered u/s. 10(23C)
CA. Tarun Ghia
Trust or institution registered u/s. 12AA
Relatives of an individual : Spouse, brother, sister, brother or sister of the spouse, brother or sister of either of the parents, lineal ascendants or descendants, lineal ascendants or descendants of the spouse, spouse of any such specified relative.
CA. Tarun Ghia
Substantial amendments w.e.f. 01 10 2009:
Immovable properties without consideration
or for inadequate consideration
Stamp Valuation exceeding Rs. 50000/-
or stamp value exceeding stated
consideration by Rs.50000/-
CA. Tarun Ghia
Per immovable property
Assessee can dispute stamp valuation
Sec 49(4): When assessee charged to tax
u/s. 56(2)(vii) : ref. Property
Diff. will be added to cost of acquisition u/s. 48
CA. Tarun Ghia
Property other than immovable property :
Shares and securities, jewellery, archaeological collections, drawings, paintings, sculptures, any work of art
Taxable in the like manner but
w.r.t. fair market value
whole of aggregate value of such property
CA. Tarun Ghia
Method of fair valuation to be prescribed
W.e.f. A.Y. 2010-11 interest received on
compensation
or enhanced compensation ref. Sec. 145A(b)
taxable in year of receipt
Sec 57 : Deduction of 50% of such interest income
Thank you : [email protected]