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

Sundaram Textiles Ltd signed an agreement on 10 May to sell land (a capital asset) to a group company for Rs 3,00,00,000. It received Rs 30,00,000 through an account payee cheque on 8 May. Registration took place on 20 July. The stamp duty value was Rs 3,60,00,000 on 10 May and Rs 3,90,00,000 on 20 July. Which stamp duty value may be taken under section 78 of the Income-tax Act, 2025?

The stamp duty value on the date of agreement, Rs 3,60,00,000, may be taken. The dates of agreement and registration differ, and part consideration was received in specified banking mode on or before the agreement date, which allows the agreement-date value to be used.

  1. ARs 3,90,00,000 on the date of registration, because transfer is complete only then
  2. BRs 3,60,00,000 on the date of agreement, since dates differ and part consideration was received by specified banking mode on or before the agreement dateCorrect
  3. CRs 3,00,00,000, because the agreement fixed the price
  4. DRs 3,75,00,000, the average of the two stamp duty values

Explanation

Where agreement and registration dates differ and part or full consideration is received by specified banking or online mode on or before the agreement date, the stamp duty value on the agreement date may be used. Rs 30 lakh was received on 8 May, before 10 May. The registration-date value is therefore not required.

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