Section 43CA - Special Provision for Full Value of Consideration - Other than Capital Gains

• Section 43CA of the Income Tax Act, 1961 provides for taxation in case of transfer of immovable property other than capital asset at low consideration.

• This means that the applicability of this section is invoked when an immovable property is held as stock in trade by the assessee and not as a capital asset.

• The section further reads that where stamp duty value of immovable property exceeds 110% of the consideration received as a result of transfer of such immovable property, then for the purposes of section 48, the stamp duty value shall be deemed to be the full value of consideration and taxable under PGBP head

• In the case of transfer of an asset being a 'residential unit', the limit of 110% shall be read as 120%.

• The above stated provision relating to residential unit will only be applicable if the following conditions are satisfied:

1. Transfer of such residential unit takes place during the period 12th November, 2020 and 30th June, 2021.
2. Such transfer is by way of first time allotment of residential unit to any person.
3. The consideration received does not exceed 2 crore rupees.

• The provisions as stated in sub-section (2) and (3) of section 50C relating to referring of case of the assessee to the Valuation Officer when the assessee contends that stamp duty value exceeds fair market value are also applicable in this case.

• 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)