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

Mehta Realty Ltd transfers a plot of land held as a capital asset to its subsidiary under a restructuring arrangement for Rs 1,00,00,000. The stamp duty value on the date of transfer is Rs 1,08,00,000. Agreement and registration happen on the same date. Under the Income-tax Act, 2025 (section 78), what is the full value of consideration?

The full value of consideration is Rs 1,00,00,000. Where the stamp duty value does not exceed 110% of the consideration received, the actual consideration is taken. Here 110% equals Rs 1,10,00,000, and the stamp duty value of Rs 1,08,00,000 falls within that limit.

  1. ARs 1,08,00,000, because stamp duty value exceeds the consideration
  2. BRs 1,00,00,000, because the stamp duty value does not exceed 110% of the considerationCorrect
  3. CRs 1,04,00,000, being the average of the two values
  4. DRs 1,10,00,000, being 110% of the consideration

Explanation

110% of Rs 1,00,00,000 is Rs 1,10,00,000. The stamp duty value of Rs 1,08,00,000 does not exceed this limit, so the actual consideration is the full value of consideration. Option A ignores the 110% tolerance band.

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