• Shubham Mishra

Section 43CA of ITC, 1961: Special provision for full value of consideration for transfer of assets

Updated: Oct 14

#Section43CA

#IncomeTax

#Transfer

#Assets

#Consideration

 

(1) Where the consideration received or accruing as a result of the transfer by an assessee of an asset (other than a capital asset), being land or a building or both, is less than the value adopted, assessed, or assessable by any authority of a State Government for the purpose of payment of stamp duty in respect of such transfer, the value so adopted, assessed, or assessable shall, for purposes of computing profits and gains from transfer of such asset, be deemed to be the value adopted, assessed, or assessable


As long as the amount adopted, assessed, or assessable by the authority in order to pay stamp duty does not exceed For the purposes of calculating profits and gains from the transfer of such asset, the consideration so received or accruing as a result of the transfer shall be deemed to be the full value of the consideration, which shall equal one hundred and six [ten] percent of the consideration received or accruing as a result of the transfer.


Provided further that if the following requirements are met, the provisions of this proviso will have the same effect in the case of the transfer of an asset that is a residential unit as if the words "one hundred and twenty per cent" had been substituted for the words "one hundred and ten per cent":—

· The transfer of such a residential unit occurs within the time frame starting on November 12, 2020, and ending on June 30, 2021;

· This transfer entails the residential unit's first-ever allocation to a person

· Any consideration received or accruing as a result of the transfer is not worth more than two crore rupees.


(2) Insofar as applicable, the provisions of subsections (2) and (3) of section 50C shall apply to the determination of the value adopted, assessed, or assessable under subsection (1).


(3) The value referred to in subsection (1) may be taken as the value assessable by any authority of a State Government for the purpose of paying stamp duty in respect of such transfer on the date of the agreement where the date of the agreement fixing the value of consideration for transfer of the asset and the date of registration of such transfer of asset are not the same.


(4) The provisions of subsection (3) only apply when the total amount of consideration, or a portion thereof, has been received on or before the date of the agreement for the transfer of the asset by way of an account payee bank draft, account payee check, electronic clearing system through a bank account, or through another electronic method that may be prescribed.

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