Amendment to [ Section-56(2)(x) ] w.e.f. Assessment Year 2019-2020 under Income Tax Act.

Section 56(2)(x), inter alia, provides the following —

1. A person receives an immovable property from any person.

2. Stamp duty value is more than consideration.

3. Difference between consideration and stamp duty value is more than Rs. 50,000.

If these conditions are satisfied, the difference between consideration and stamp duty value is taxable as income in the hands of recipient under section 56(2)(x) under the head “Income from other sources”.

Amendments - The above provisions have been amended as follows —

Section 56(2)(x) applicable only if stamp duty value exceeds 105% of consideration –

From the assessment year 20 19-20, section 56(2)(x) will be applicable if the following conditions are satisfied —

1. A person receives an immovable property from any person.

2. Stamp duty value exceeds 105 per cent of consideration.

3. Difference between consideration and stamp duty value is more than Rs. 50,000.

From the assessment year 2019-20, the difference between stamp duty value and consideration is taxable under the head “Income from other sources” only if the above conditions are satisfied.

Section 56(2)(x) not applicable in transactions between holding and 100% subsidiary companies –

Fourth proviso to section 56(2)(x) has been amended with effect from the assessment year 2018-19. After this amendment, section 56(2)(x) will not be applicable if a capital asset is received by a holding company from its 100 per cent subsidiary company (and vice versa) provided the transferee-company is an Indian company.