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

Rohan Realty signs an agreement on 5 May to sell a capital asset building to Sunita Ltd for Rs 3,00,00,000 and receives Rs 20,00,000 by account payee cheque on that date. Registration happens on 20 July. Stamp duty value on 5 May is Rs 3,40,00,000 and on 20 July is Rs 3,80,00,000. Which value may be taken as the full value of consideration?

The full value of consideration may be taken as Rs 3,40,00,000, the stamp duty value on the agreement date. The dates differ and part payment came by specified banking mode on or before the agreement date. That value exceeds 110% of the price, so it is deemed the consideration.

  1. ARs 3,00,00,000, the agreed price
  2. BRs 3,80,00,000, the value on registration date
  3. CRs 3,40,00,000, the stamp duty value on the agreement dateCorrect
  4. DRs 3,60,00,000, the average of the two stamp duty values

Explanation

The agreement and registration dates differ and part consideration was received by specified banking mode on the agreement date, so the stamp duty value on the agreement date may be used. Rs 3,40,00,000 exceeds 110% of Rs 3,00,00,000 (Rs 3,30,00,000), so it applies. Using the registration date value ignores this relief.

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