Response

As per the said query, there are no such legal consequences where a property is registered at a lower value. However, the capital gains tax will be more than the value at which the property is registered. Here the property is registered at a lower value so as per the Income tax rules, you will be liable to pay the tax as per the actual value and not as per the registered value. If you do not pay according to the section 50C of the Income Tax Act then it shall amount to tax evasion which is an offence under section 104A of the Income Tax Act.

Section 50C provides that where the consideration received or accruing as a result of transfer of a capital assets, being land or building or both is less than the value adopted or assessed or assessable by an authority of a state Govt. for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall be deemed to be the full value of the consideration received or accruing as a result of such transfer for computing capital gain.

If sales consideration is less than SDV, than SDV will be full value of Consideration (FVOC).

2. However if SDV does not more than 110% of consideration than SC will be FVOC.

It provides that the provision of first proviso to section 50C(1) shall apply only in case where the amount of consideration or a part thereof has been received by way of an account payee cheque or account payee bank draft of use of electronic clearing system through a bank account on or before the date of the agreement for transfer of the asset.

Reference: Income Tax Act,1961
50C. Special provision for full value of consideration in certain cases. Ñ (1) Where the
consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land
or building or both, is less than the value adopted 6
[or assessed or assessable] by any authority of a State
Government (hereafter in this section referred to as the _stamp valuation authority_) for the purpose of
payment of stamp duty in respect of such transfer, the value so adopted 6
[or assessed or assessable] shall,
for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as
a result of such transfer.]
7
[Provided that where the date of the agreement fixing the amount of consideration and the date of
registration for the transfer of the capital asset are not the same, the value adopted or assessed or
assessable by the stamp valuation authority on the date of agreement may be taken for the purposes of
computing full value of consideration for such transfer

Provided further that the first proviso shall apply only in a case where the amount of consideration, or
a part thereof, has been received by way of an account payee cheque or account payee bank draft or by
use of electronic clearing system through a bank account, on or before the date of the agreement for
transfer.]
(2) Without prejudice to the provisions of sub-section (1), whereÑ
(a) the assessee claims before any Assessing Officer that the value adopted 1
[or assessed or
assessable] by the stamp valuation authority under sub-section (1) exceeds the fair market value of
the property as on the date of transfer;
(b) the value so adopted 1
[or assessed or assessable] by the stamp valuation authority under
sub-section (1) has not been disputed in any appeal or revision or no reference has been made before
any other authority, court or the High Court,
the Assessing Officer may refer the valuation of the capital asset to a Valuation Officer and where any
such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clause (i) of
sub-section (1) and sub-sections (6) and (7) of section 23A, sub-section (5) of section 24, section 34AA,
section 35 and section 37 of the Wealth-tax Act, 1957 (27 of 1957), shall, with necessary modifications,
apply in relation to such reference as they apply in relation to a reference made by the Assessing Officer
under sub-section (1) of section 16A of that Act.
2
[Explanation 1.]ÑFor the purposes of this section, _Valuation Officer_ shall have the same meaning
as in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957).
3
[Explanation 2.ÑFor the purposes of this section, the expression _assessable_ means the price which
the stamp valuation authority would have, notwithstanding anything to the contrary contained in any other
law for the time being in force, adopted or assessed, if it were referred to such authority for the purposes
of the payment of stamp duty.]
(3) Subject to the provisions contained in sub-section (2), where the value ascertained under
sub-section (2) exceeds the value adopted 1
[or assessed or assessable] by the stamp valuation authority
referred to in sub-section (1), the value so adopted 1
[or assessed or assessable] by such authority shall be
taken as the full value of the consideration received or accruing as a result of the transfer.]

276C. Wilful attempt to evade tax, etc.Ñ(1) If a person wilfully attempts in any manner whatsoever
to evade any tax, penalty or interest chargeable 4
[or imposable, or under reports his income,] under this
Act, he shall, without prejudice to any penalty that may be imposable on him under any other provision of
this Act, be punishable,Ñ
(i) in a case where the amount sought to be evaded 1
[or tax on under-reported income] exceeds
2
[twenty-five hundred thousand rupees], with rigorous imprisonment for a term which shall not be
less than six months but which may extend to seven years and with fine;
(ii) in any other case, with rigorous imprisonment for a term which shall not be less than three
months but which may extend to 3
[two years] and with fine.
(2) If a person wilfully attempts in any manner whatsoever to evade the payment of any tax, penalty
or interest under this Act, he shall, without prejudice to any penalty that may be imposable on him under
any other provision of this Act, be punishable with rigorous imprisonment for a term which shall not be
less than three months but which may extend to 8
[two years] and shall, in the discretion of the court, also
be liable to fine.

202100297-20210042-16370

LAWAYZ-2023-345