Question And Answer
Subject: Whether section 50C of IT Act is applicable to transfer of lease hold rights ?
Querist: Pran N Shangari
Answered by:
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Date: May 27, 2021
Query asked by Pran N Shangari

If a leasehold land on which building is constructed by self is sold/ transferred for a consideration, will the transaction attract sec 50C.Does the Stamp duty value applies to only freehold land or leasehold land also.

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Answer given by

One has to read the terms of the lease deed and also transfer deed . It may be difficult to answer without verifying the documents . It also depends upon the which State the property is situated .
It may be desirable to contact the tax consultant and also a lawyer who advices on registration of documents .

In Noida Cyber park (P.) Ltd v. ITO (2021) 186 ITD 593 (Delhi) (Trib) held that the expression ‘land or building’ in its coverage is quite distinct from the expression ‘any right in land or building’. The legislature, in its wisdom, has used the expression ‘land or building or both’ in section 50C(1) of the Act, and not the expression ‘any right in land or building’. Thus, section 50C covers only capital asset being land or building or both and it would not cover transfer of leasehold rights in land and building.

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