Section 55A-Reference to Valuation Officer

Section 55A

Section 55A has provided the circumstances in which and the purposes for which; the tax authorities can refer the Valuation Officer for valuation of the capital asset.

Section 55A-Reference to Valuation Officer

As per section 55A of the Income Tax Act, intending to ascertain the fair market value of the capital asset; the assessing officer may refer the valuation of a capital asset to a valuation officer. The circumstances in which the assessing officer can refer to the valuation officer are as follows:

a) In the case, where the value of the asset which the assessee claims is as per the estimate made by the registered valuer; if an assessing officer is of the opinion that the amount so claimed is at variation with its fair market value.

b) In any other case, if the assessing officer is of opinion;

  • that the FMV of the asset surpasses the value of the asset as claimed by the taxpayer; by more than such percentage of the value of an asset as so claimed or by higher than such amount; as may be prescribed in this behalf; or
  • that having respect to the nature of an asset & other relevant circumstances, it is essential so to do.

and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) & (6) of section 16A; clauses (ha) & (i) of sub-section (1) & sub-sections (3A) & (4) of section 23; sub-section (5) of section 24, section 34AA, section 35 & section 37 of Wealth-tax Act, 1957 (27 of 1957); shall with the significant adjustments, apply in relation to such reference as they apply in relation to a reference made by an assessing officer under section 16A(1) of that Act.

Explanation:

In this section, “Valuation Officer” has the same meaning, as; in clause (r) of section 2 of the Wealth-tax Act, 1957 (27 of 1957).

Currently, the percentage of the value of the asset and; the amount referred to in sub-clause (i) of clause (b) of section 55A is 15 percent and Rs. 25,000; respectively. The report of the valuation by a registered valuer in regard of any asset; shall be furnished in the appropriate form specified in rule 8D of the Wealth-tax Rules, 1957; and shall be verified in the manner indicated in such form.

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