Amendments in section 43CA,50C and 56

Amendments in section 43CA,50C and 56
 

Amendments in section 43CA,50C and 56:-

Section 43CA  provides that where the consideration declared to be received or accruing as a result of the transfer of land or building or both, is less than the value adopted or assessed or assessable by any authority of a State Government (i.e. “stamp valuation authority”) for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall for the purpose of computing profits and gains from transfer of such assets, be deemed to be the full value of consideration.
 
The said section also provide that where the value adopted or assessed or assessable by the authority for the purpose of payment of stamp duty does not exceed 105% of the consideration received or accruing as a result of the transfer, the consideration so received or accruing as a result of the transfer shall, for the purposes of computing profits and gains from transfer of such asset, be deemed to be the full value of the consideration.
 
Section 50C provides that where the consideration declared to be received or accruing as a result of the transfer of land or building or both, is less than the value adopted or assessed or assessable by stamp valuation authority for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall be deemed to be the full value of the consideration and capital gains shall be computed on the basis of such consideration under section 48 of the Act(i.e. Computation of Capital Gains).
 
The said section also provides that where the value adopted or assessed or assessable by the stamp valuation authority does not exceed 105% of the consideration received or accruing as a result of the transfer, the consideration so received or accruing as a result of the transfer shall, for the purposes of section 48(i.e. Computation of Capital Gains), be deemed to be the full value of the consideration.
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Clause (x) of sub-section (2) of section 56  provides that where any person receives, in any previous year, from any person or persons on or after 1st April, 2017, any immovable property, for a consideration which is less than the stamp duty value of the property by an amount exceeding Rs.50,000, the stamp duty value of such property as exceeds such consideration shall be charged to tax under the head “income from other sources”.
 
It also provide that where the assessee receives any immovable property for a consideration and the stamp duty value of such property exceeds 5% of the consideration or Rs.50,000, whichever is higher, the stamp duty value of such property as exceeds such consideration shall be charged to tax under the head “Income from other sources”.
      

This limit of 5% has been increased to 10%.

This amendment will take effect from 1st April, 2021 and will, accordingly, apply in relation to the assessment year 2021-22 and subsequent assessment years.
 

For eg. Suppose if value of the property is Rs.100 and stamp duty value of such property is Rs.108(i.e. Within the limit of Rs.110),then for the purpose of above mentioned sections, full value of consideration can be taken as Rs.100.If stamp duty value of such property is Rs.112,then for the purpose of Full Value of Consideration, stamp duty value of Rs.112 has to be taken because it is not within the tolerable limit of 10%.

(i) (ii) (iii) (iv) (v)
Sr. No. Value of Property Stamp Duty Value 110% of (ii) Full Value of Consideration to be taken
 
1 100 107 110 100
2 100 115 110 115
3 100 95 110 100
4 90 95 99 90
5 80 90 88 90
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