Section 43CA of ITA, 1961 : Section 43Ca: Special Provision For Full Value Of Consideration For Transfer Of Assets Other Than Capital Assets In Certain Cases

Explanation using Example

Imagine Mr. Sharma decides to sell a piece of land, which is not a capital asset for his business, to Mr. Gupta for ₹50 lakhs. The State Government's stamp duty authority, however, assesses the land's value at ₹60 lakhs for the purpose of calculating stamp duty. According to Section 43CA of the Income-tax Act, 1961, for the purpose of computing profits and gains from the transfer of this land, Mr. Sharma must consider ₹60 lakhs as the full value of consideration and not the ₹50 lakhs he actually received.

However, if the stamp duty value was ₹52 lakhs, which is within 105% of the actual consideration received (i.e., ₹50 lakhs), Mr. Sharma would not have to adjust the consideration value for tax purposes, as it is within the permissible range. Thus, he would consider the actual sale price of ₹50 lakhs as the full value of consideration.