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

Under a scheme, Vihaan Ltd transfers a capital asset for a consideration that cannot be ascertained on the date of transfer. For computing capital gains under the Income-tax Act, 2025, what is deemed to be the full value of consideration?

The fair market value on the date of transfer is deemed to be the full value of consideration. Section 80 applies this rule when the consideration from transfer of a capital asset is not ascertainable or cannot be determined, for computing capital gains.

  1. ANil, as no consideration is ascertainable
  2. BThe book value of the asset in the transferor's accounts
  3. CThe cost of acquisition of the asset
  4. DThe fair market value of the asset on the date of transferCorrect

Explanation

Section 80 states that where consideration from transfer of a capital asset is not ascertainable or cannot be determined, its fair market value on the date of transfer is deemed to be the full value of consideration. Book value and cost are not the statutory measure.

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