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

Kavya Developers Ltd holds land as stock-in-trade and sells it for ₹1,00,00,000 when the stamp duty value is ₹1,08,00,000. Under the Income-tax Act, 2025 (section 53), what is the full value of consideration for computing profits and gains from this transfer?

The full value of consideration is ₹1,00,00,000. Section 53(2) states that where the stamp duty value does not exceed 110% of the consideration received, the actual consideration is used. The limit here is ₹1,10,00,000 and the stamp duty value of ₹1,08,00,000 falls within it.

  1. A₹1,08,00,000 because the stamp duty value is higher
  2. B₹1,04,00,000 being the midpoint
  3. C₹1,00,00,000 because the stamp duty value does not exceed 110% of the considerationCorrect
  4. DIt cannot be determined without a Valuation Officer's report

Explanation

Section 53 covers non-capital assets such as stock-in-trade land. Under section 53(2), if the stamp duty value does not exceed 110% of the consideration, the consideration is the full value. 110% of ₹1,00,00,000 is ₹1,10,00,000 and ₹1,08,00,000 is within it.

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