Section 53 — Full value of consideration for transfer of assets other than capital assets in certain cases. Successor to s.43CA of the 1961 Act.
Section 53 is in Chapter IV — Computation of Total Income, which runs from section 13 to section 95.
Sub-section (1) applies where an asset other than a capital asset, being land or building or both, is transferred for less than the stamp duty value; that stamp duty value is then deemed to be the full value of consideration for computing profits and gains from the transfer.
Sub-section (2) provides a tolerance: sub-section (1) does not apply where the stamp duty value does not exceed 110% of the consideration, and in that case the consideration itself is deemed to be the full value. Sub-section (3) permits the stamp duty value as on the date of the agreement fixing the consideration to be taken where that date and the date of registration differ, and sub-section (4) makes that option available only where consideration, or part of it, was received by specified banking or online mode on or before the agreement date. Sub-section (5) applies section 78(2) and (3) to the determination of the stamp duty value.
Land and buildings held as stock-in-trade can be sold at a stated price well below the State's own valuation, leaving the difference out of business income. The section substitutes the stamp duty value, while the 110% band keeps ordinary valuation differences out of charge. The agreement-date option recognises that prices are fixed when a deal is struck, but only where money moved through a traceable channel by then.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Tolerance below which the stamp duty value is not substituted | 110% of the consideration received or accrued | Where the stamp duty value does not exceed this, the consideration itself is the full value of consideration | Sub-section (2) |
The 110% band is a cliff, not a slab: once crossed, the whole stamp duty value is substituted, not just the excess. The section reaches only assets that are not capital assets, and confusing that with section 78 produces the wrong head of income. The agreement-date relief is easily lost, since sub-section (4) requires part of the consideration to have come by specified banking or online mode on or before the agreement date. The stamp valuation is not final either — sub-section (5) imports the machinery in section 78(2) and (3).
A developer sells a flat held as stock-in-trade for Rs 90 lakh when the stamp duty value is Rs 96 lakh. Since Rs 96 lakh does not exceed 110% of Rs 90 lakh, that is Rs 99 lakh, the income is computed on the Rs 90 lakh received. Had the stamp duty value been Rs 1.05 crore, the whole of it would be substituted, adding Rs 15 lakh — not merely the Rs 6 lakh by which it crosses the 110% line.
In the computation of business income on the sale of land or a building held as stock-in-trade, and in the addition an Assessing Officer makes after comparing the sale deed's stamp duty valuation with the consideration in the books.
The provisions of sub-section (1) shall not apply if the stamp duty value does not exceed 110% of the consideration received or accrued
See the full 1961 to 2025 concordance.
See the circulars index.