Section 50C: Special provision for full value of consideration in certain cases.

Asif Khichi
Jun 3, 2021
2 min read

Updated: Jun 12, 2021

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

If land or building or both are held as stock, then section 43CA will be applicable

Lets revisit: How to Calculate Capital Gain

Particulars Amt

Full value of Consideration

("FVC") A XX

Less:

Expenditure – Transfer related XX

Cost of Acquisition XX

Cost of Improvement XX

Total Cost B XX

Capital Gain C (A-B) XX

1. As per Section 50C: In case the sale value of land or building or both, being a Capital Asset, 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 Capital Gain.

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

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