43CA:Spcl provision for full value of consideration for transfer of assets other than capital Asset

Click to watch

Applicability: Land or Building or both, held as stock, sold at a value which is less than the value as per Stamp Duty Authority.

If land or building or both are held as Capital Asset, then section 50C will be applicable.

1. As per Section 43CA: In case the sale value of land or building or both, being a stock, is Less than the value adopted/assessed/assessable by Stamp Duty Authority, then the stamp duty value shall be considered as “Full Value of Consideration” for calculating Profit or Gain from Business or Profession.

However, if Stamp Duty Value is upto 110% of Sale value, then “Full value of consideration” will be Sale value.

Example Amt in lac

SV SDV SDV% FVC

1 1.20 120% 1.20 (SDV)

1 1.15 115% 1.15 (SDV)

1 1.10 110% 1 (SV)

1 1.05 105% 1 (SV)

SV= Sale Value,

SDV= Stamp Duty Value

FVC=Full value of Consideration

2. Date of Agreement and Date of Registration of Asset is Different: Whether we should consider stamp duty value as on the Date of agreement or Date of registration??????

The stamp duty value on the Date of Agreement will be considered subject to below conditions:

• Full or Part of consideration is received on or before the date of agreement. AND

• Amount is received through banking Channel

Banking Channel - Account payee cheque or account payee bank draft or by use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed.

3. Assessee claims before Assessing Officer(“AO”) that Stamp Duty Value exceeds Fair Market Value AND

Scenario 1: Assessee files an appeal before any Authority/High Court

Full Value of Consideration = Value as decided by such Authority

Scenario 2: Assessee does NOT file an appeal in any authority/High Court.

Assessing Officer will refer the valuation of asset to a Valuation Officer.

• IF FMV by Valuation Officer is Less than Stamp Duty Value, Full Value of Consideration = FMV

• IF FMV by Valuation Officer is greater than Stamp Duty Value, Full Value of Consideration = Stamp Duty Value

EXAMPLE (Amt in lac)

Case FMV by VO (SDV) FVC

1 20 22 20 (FMV)

2 18 17 17 (SDV)

4. Special benefits in case of transfer of Residential Unit.

If Stamp Duty Value is upto ≤ 120% of Sale value, then “Full value of consideration” will be sale value.

Conditions:-

a) Transfer takes place between 12th Nov, 2020 to 30th June, 2021,

b) First time allotment of residential unit to any person, AND

c) Sale value ≤ 2 crore (Max)

---