1. If we purchase plot of land at below circle value
then diff will be treated as taxable as per sec 56, then what will b the
cost of acquisition at the time of sale? Need your opinion and clarification on
this topic
2. Is there any provision for LIC agent to get deduction of
1/3rd against exp from commission he receive? Just like standard deduction from
housing income?
Reply
As per section 49(4)
of Income tax Act, 1961, where there is a gain arising out of transfer of
property, the cost of acquisition of such property will be taken as per section
56(2)(vii) or (viia) of the act.
Therefore, at the time
of sale, the amount of stamp duty of such property will be treated as the cost
of acquisition.
(ii)CBDT vide circular
no.648 dated 30.03.1993 allowed adhoc deduction on commission earned by LIC
agent. When commission earned is less than Rs 60000/- in a year, the deduction
on the first year’s commission is 50% of the commission. In case of renewal
commission the deduction available is 15%. However, the maximum deduction
allowed shall be limited to Rs 20,000. Where separate figures of commission is
not available it would be 33.33% of commission subject to Rs 20000/-. In case
commission earned is more than Rs 60000/- no adhoc deduction will be available,
only actual expenses under head profit from business and profession will be
allowed.