Couple buys Rs 60L flat, husband taxed on Rs 34.81L stamp-duty gap; ITAT objects
The Income Tax Appellate Tribunal (ITAT) in Mumbai has challenged a tax officer's decision to attribute the entire tax liability of a property's stamp-duty gap to only one of two co-owners. The case centers on whether tax on the difference between purchase price and stamp-duty value can be levied on a single spouse.
Why it matters
This ruling provides clarity on tax assessment practices for joint property ownership and prevents arbitrary tax burdens on individual taxpayers.
You buy a house jointly with your wife. When you register it the stamp duty value is higher, and the Income Tax Department decides to place the full tax liability on you. This raises an important question: can one co-owner be taxed on the entire difference between property price and stamp-duty value?Can the entire difference between a property’s actual purchase price and its stamp-duty value be added to the income of just one of its co-owners? A recent ruling by ITAT Mumbai has addressed this question in a case involving a husband and wife who jointly purchased a property.The tribunal was dealing with the case of a Mumbai taxpayer who purchased a flat jointly with his wife in Chembur in 2017. The couple paid Rs 60 lakh for the property, while its stamp-duty value was Rs 94.8 lakh.
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