Q.1)  What is the definition of Stamp Duty as per section 56(2) (vii)?

Ans.  As per section 56(2) (vii), the “stamp duty value” of immovable property means the value adopted or assessed by any authority of the Central Government or by the Assessing Officer for the purpose of payment of stamp duty.      

Q.2)  Mr. Rohit received the building as a gift from his Father. The cost of previous owner is Rs. 35000 & stamp duty value is Rs. 200000. Is Rohit liable to tax u/s 56(2) (vii)

Ans.  As per section 56(2) (vii), any sum of money or property received from the following is exempt from the tax.

• From any relative or a local authority,
• On the occasion of marriage of the individual,
• Under a will or by a way of inheritance,
• In contemplation of death of the payer,
• From any fund, foundation, university, educational institution, hospital or any trust as per section 10(23C)
• From any charitable institute registered u/s 12AA.

Hence, as per this query Mr. Rohit has received the building as a gift from his Father. Since, the father is a relative of Rohit, so the stamp duty of Rs. 200000 received by him is exempt from tax.

Q.3)  Mr. X sells a house for Rs. 30 Lakhs on 1^st May 2010. The same was valued for the purpose of stamp duty at –

  i.  Rs. 30.46 Lakhs.

 ii.  Rs. 30.52 Lakhs.   

Is X liable to pay tax u/s 56(2)(vii)?

Ans.  As per section 56(2)(vii), any immovable property, received without consideration, the stamp duty value of which exceeds Rs.50,000, the stamp duty value of such property will be considered.

In case (i), since the stamp duty value of Rs. 30.46 Lakhs, does not exceed Full value consideration (FVC) of Rs. 30 Lakhs by more than Rs. 50000, therefore FVC would be Rs.30 Lakhs.

In case (ii), since the stamp duty value of Rs. 30.52 Lakhs, exceed Full value consideration (FVC) of Rs. 30 Lakhs by Rs. 50000, therefore FVC would be Rs.30.52 Lakhs.

Q.4)  Mr. Rohit receives the stock (as a property) of Rs.2, 00,000, which is held as stock in trade. The stamp duty value of the same is Rs.90, 000. Is Rohit liable to pay tax?

Ans.  As per section 56(2)(vii), property includes,

• Immovable property being land or building or both,

• Shares & securities ( not held as stock in trade),
• Jewellery,
• Archaeological collections,
• Drawings & paintings,
• Any work of art or sculptures,
• Bullion W.r.e.f 1-6-2011.

Hence Rohit is not exempt from tax as shares are held as stock in trade & is liable to pay tax of Rs.2, 00,000.

Q.5)  Mr. Rohit receives the building of Rs.40, 000. The stamp duty value of the same is Rs.50, 000. Is Rohit liable to pay tax u/s 56(2) (vii)?

Ans.  As per section 56(2)(vii), any immovable property, received without consideration, the stamp duty value of which exceeds Rs.50,000, the stamp duty value of such property will be considered.

Hence, in this case since stamp duty value does not exceed Rs. 50,000 so Rohit is not liable to pay any tax.

Q.6)  Mr. Rohit receives the building of Rs.40, 000. The stamp duty value of the same is Rs.88, 000. Is Rohit liable to pay tax u/s 56(2) (vii)?

Ans.  As per section 56(2)(vii), any immovable property, received without consideration, the stamp duty value of which exceeds Rs.50,000, the stamp duty value of such property will be considered.

Hence, in this case since stamp duty value exceed Rs. 50,000 so Rohit is liable to pay tax of Rs. 88,000.