Property value rose before registration; ITAT scraps Rs 11.35 lakh tax on buyer
The Income Tax Appellate Tribunal in Kolkata ruled that a homebuyer should not be taxed on the difference between the purchase price and the increased stamp duty value if the agreement was signed before the rate hike. The tribunal provided relief by noting that the buyer had already paid a significant advance at the original, lower circle rate.
Why it matters
Provides legal precedent for homebuyers facing unfair tax burdens due to delays between property agreements and registration.
You agree to purchase a property and even give a portion of the payment. But by the time the property registration happens, the circle rate in the area has gone up, increasing the stamp duty, which leads to you getting a tax notice. What do you do then?In one such case, the Kolkata bench of the Income Tax Appellate Tribunal (ITAT) has ruled on this. Let’s find out what the case was about, and why ITAT gave tax relief to the homebuyer.What the case is aboutIn 2021, the taxpayer and her husband entered into a registered agreement to purchase an immovable property for a total price of Rs 1.23 crore.However, the registered conveyance deed was subsequently executed in 2023 without any change to the original purchase price of Rs 1.23 crore.However, by the time the property was registered in September 2023, its stamp duty or circle value had climbed to…
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