Applicability of Section 50C and Sec. 56(2)(x)/ Sec. 56(2)(vii) for a buyer while purchasing rural agriculture land under SDV

1. No

2. No

3. No

4. Yes

1. Applicability of Section 50C

Section 50C of the Income Tax Act applies only to the seller of immovable property, not the buyer. It deems the stamp duty value (SDV) as the full value of consideration for the purpose of calculating capital gains when the sale consideration is lower than the SDV. Since you are the buyer and the land is rural agricultural land (which is not a capital asset), Section 50C does not apply to your transaction.

2. Relevance of Sections 56(2)(x) and 56(2)(vii)

Section 56(2)(x) is applicable to the buyer if they receive property for inadequate consideration. However, rural agricultural land is excluded from the definition of "property" under this section. Therefore, no tax will be levied under Section 56(2)(x) or the earlier Section 56(2)(vii) on your purchase of rural agricultural land, even if the consideration is lower than the SDV.

3. Other Relevant Sections and Future Tax Liability

There are no other sections in the Income Tax Act that would impose a tax liability on the buyer of rural agricultural land simply due to the difference between the sale consideration and SDV. Since rural agricultural land is not considered a capital asset, there should be no additional tax implications from this transaction.

4. Proceeding with the Transaction

Given that Sections 50C, 56(2)(x), and other relevant sections do not apply to your situation, you can proceed with the transaction without worrying about future tax implications under the Income Tax Act.

In summary, you should be safe from any tax liabilities in this transaction as a buyer of rural agricultural land.

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