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CS Professional · Corporate Restructuring, Valuation and Insolvency · Taxation and Stamp Duty Aspects of Corporate Restructuring

Ananya Pvt Ltd sells land (a capital asset) for ₹2,00,00,000. The stamp duty value on the date of registration is ₹2,18,00,000. Which statement is correct under the Income-tax Act, 2025?

The full value of consideration is ₹2,00,00,000. The stamp duty value of ₹2,18,00,000 is within 110% of the consideration (₹2,20,00,000), so section 78(1)(b) lets the actual consideration stand as the full value of consideration.

  1. AFull value of consideration is ₹2,18,00,000 because stamp duty value is higher
  2. BFull value of consideration is ₹2,00,00,000 because the stamp duty value does not exceed 110% of the considerationCorrect
  3. CFull value of consideration is ₹2,20,00,000, being 110% of consideration
  4. DFull value of consideration must be determined by a Valuation Officer in every such case

Explanation

110% of ₹2,00,00,000 is ₹2,20,00,000. The stamp duty value of ₹2,18,00,000 does not exceed this, so under section 78(1)(b) the actual consideration of ₹2,00,00,000 is deemed to be the full value of consideration. Option one ignores the tolerance band.

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