I purchased a plot along with my cousins in the year 2009 for Rs.7.45 Lakhs. Now we are going to sell the same at 35.00 Lakhs. Now the problem is Registration Fairvalue for the plot is 80.00 Laks. So should we pay tax on selling price 35.00 Lakhs or on Fairvalue 80.00 Lakhs. Please guide me in this matter.

Admin’s Response:

If the circle rate is 80.00 lacs, then tax would have to be paid on calculation of 80.00 lacs unless you can prove that the circle rate is higher than the market rate in this case. Please refer Section 50 C of the Income Tax Act 1961 for this purpose.