India: “Land or building” includes leasehold rights; shares held as stock-in-trade versus capital assets; tax rate for private discretionary trusts (court decisions)

The KPMG member firm in India prepared reports on the following recent court decisions:

• The Bombay High Court held that section 50C of the Income-tax Act, 1961, which provides that the value adopted by the Stamp Valuation Authority (SVA) for levy of stamp duty must be used to compute the amount of capital gains recognized on transfers of any “land or building” if such value exceeds the actual consideration received in the transfer, applies to "land or building" held in any form, including leasehold rights. Read the April 2025 report
• The Mumbai Bench of the Tribunal held that section 56(2)(viia) of the Income-tax Act, 1961, which provides that if a firm or closely held company receives property for consideration less than fair market value (FMV) the difference must be treated as income to the recipient, did not apply to shares acquired below FMV when such shares are held as stock-in-trade, rather than capital assets. Read the April 2025 report
• The Mumbai Special Bench of the Tribunal held that the tax on private discretionary trusts, which is computed at the maximum marginal rate (MMR) under the relevant Finance Act, must be levied based on the amount of income earned by a particular trust, and not automatically at the highest rate applicable to the highest income bracket for individuals. Read the April 2025 report