Section 50C - Special Provision for Full Value of Consideration - Capital Gains Taxability

• Section 50C of the Income Tax Act, 1961 prescribes provisions regarding capital gains taxation in case of immovable property transferred for low consideration.

• This section is applicable only in case of transfer of a capital asset which is land or building or both i.e. the provisions of this section will apply only in case of transfer of immovable property.

• In a case, where stamp duty value of immovable property exceeds 110% of the consideration received for transfer of immovable property, then for the purpose of section 48, the stamp duty value of such immovable property shall be deemed to be the full value of consideration while calculating capital gains tax liability.

• If the assessee claims that the stamp duty value of the property exceeds the fair market value of such property and the stamp duty value has not been disputed by the assessee in any appeal or before any court, then the Assessing Officer may (at his discretion) transfer the case of the assessee to the Valuation Officer. 

• If the value determined/ascertained by the Valuation Officer exceeds the stamp duty value of the property, then the stamp duty value shall be deemed to be the full value of consideration.

• If the value determined/ascertained by the Valuation Officer is less than the stamp duty value of the property, then the value so determined by the Valuation Officer shall be deemed to be the full value of consideration.

• Stamp duty value means the value adopted or assessed or assessable by the stamp valuation authority.

• If the date of agreement and date of registration are not same, then the stamp duty value as on the date of agreement may be taken as the full value of consideration if whole or part of the consideration has been received by the assessee on or before the date of agreement by way of 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. (Such other electronic modes have been prescribed in Rule 6ABBA)