Bidyut Dutta
Asked February 21, 2017

Registration of apartment

  • 1 Answer

I am going to purchase a second sell flat at Bidhannagar, Saltlake. Now West Bengal Govt. has reduced Registration & Stamp duty fee, which will be effective from April 2017 but market value of property yet to declared. Shall I go for registration of my flat or wait for April 2017. In case market value will increase, what will be the better option for me i.e., before April 2017 or after April 2017.

Answer 1

Section 50C of the Income-tax Act, 1961, which deals with computation of capital gains, also contains rules  regarding the stamp duty value of a property , which is based on the date of transfer.

 Section 50C of the income-tax Act specifically deals with the gross value that should be considered for the computation of capital gains in case of transfer of land or building. It comes into force when there is a difference between the sale value stated by the seller and value of the property assessed by the stamp duty authority. So, if the value stated in the instrument of transfer is less than the valuation assessed or assessable by the stamp duty authorities, the latter valuation will be considered to compute capital gains.


For instance, if you sell a property for Rs.70 lakh, but according to the authorities, the property is valued at Rs.75 lakh, then the sale value of the property will be considered to be Rs.75 lakh. Further to this, the capital gain arising from the sale will be computed on the basis of Rs.75 lakh.


However, in 2016, the act was amended to state where the date of agreement to sell and date of transfer (registration of property in the name of the new buyer) are different. In such cases, the value assessed by the stamp duty authority on the date of agreement will  be considered to compute the full value for the transfer of property. This rule will be applicable in all states starting 1 April, 2017- as a result all state governments- including West Bengal, are re-formulating the rates related to Stamp Duty and Registration. The rules only apply when the amount of consideration, or a portion of it, has been received by the transferee or the seller of the property on or before the date of agreement. It is also necessary that the money should be received by way of an account payee cheque, account payee bank draft, or by an electronic clearing system (ECS) mandate. Payment in cash will not be considered.


So, in case you have not received any consideration for that property in non cash form, you could wait to py the registration and stamp fees after 1 April, 2017- which will depend upon value assessed by the stamp duty authority on the date of agreement. However, if you have received any consideration for this property in non case form like account payee cheque, account payee bank draft, or by an electronic clearing system (ECS) mandate- you are advised to pay the stamp duty based on the  value of a property as it was on the date of transfer.

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