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nism-series-xb-section-56-gift-taxation-immovable-property[ INVESTMENT ADVISER (LEVEL 2) ]

An individual purchases a residential apartment from a non-relative for a sale consideration of ₹45,00,000, while the official Stamp Duty Value (SDV) is ₹60,00,000. How is the ₹15,00,000 difference taxed in the hands of the buyer?

[ A ]100% tax-free in the buyer's hands.
[ B ]Taxed at a flat 50% luxury penalty rate.
[ C ]Taxed as 'Income from Other Sources' in the buyer's hands at marginal slab rates (because the difference exceeds ₹50,000 AND exceeds 10% of sale consideration).[ CORRECT ]
[ D ]Taxed strictly in the hands of the municipal registrar.
Takeaway

Option C is correct: Taxed as 'Income from Other Sources' in the buyer's hands at marginal slab rates (because the difference exceeds ₹50,000 AND exceeds 10% of sale consideration).

Derivation
Section 92(2)(m) of the Income-tax Act, 2025 (the erstwhile Section 56(2)(x) of the Income-tax Act, 1961) targets under-valued property purchases as a potential vehicle for unaccounted money changing hands. Two conditions must both be met: the gap between Stamp Duty Value and actual consideration must exceed ₹50,000, and it must also exceed 10% of the sale consideration. Here the gap is ₹15,00,000 (₹60L SDV minus ₹45L consideration), clearing the ₹50,000 floor easily, and as a share of the ₹45,00,000 consideration works out to roughly 33%, well past the 10% threshold. Because both conditions are met, the entire ₹15,00,000 gap is taxed in the buyer's hands as 'Income from Other Sources' at their marginal slab rate.
Why the others fail
A — 100% tax-free in the buyer's hands.
Section 92(2)(m) (the erstwhile Section 56(2)(x)) explicitly taxes the SDV-to-consideration gap as deemed income once it crosses the ₹50,000-and-10% dual threshold, rather than exempting it outright.
B — Taxed at a flat 50% luxury penalty rate.
There is no 50% luxury penalty provision under the Income Tax Act; the applicable treatment is taxation at the buyer's own marginal slab rate under Section 92(2)(m) (the erstwhile Section 56(2)(x)).
D — Taxed strictly in the hands of the municipal registrar.
Income tax under Section 92(2)(m) (the erstwhile Section 56(2)(x)) is levied on the individual buyer who benefited from the under-valuation, not on the municipal registrar who merely records the transaction.