Sub-section (1) deems the stamp duty value to be the full value of consideration for section 72 where the consideration received or accruing on the transfer of a capital asset being land or building or both is less than that stamp duty value. It carries two qualifications. Clause (a) allows the stamp duty value on the date of agreement to be taken instead, if the date of the agreement fixing the consideration and the date of registration are not the same, and part or full consideration was received on or before the date of the agreement in "specified banking or online mode" as defined in section 66(32). Clause (b) is a tolerance band: if the stamp duty value does not exceed 110% of the consideration received or accruing, the consideration itself is deemed to be the full value of consideration for section 72.
Sub-section (2) lets the Assessing Officer refer the valuation of the capital asset to a Valuation Officer, with section 269(3) to (8) applying with necessary modifications, but only where the assessee claims that the stamp duty value exceeds the fair market value of the property on the date of transfer and the stamp duty value has not been disputed in any appeal or revision and no reference has been made before any other authority, court or the High Court. Sub-section (3) caps the result: if the value determined by the Valuation Officer exceeds the stamp duty value, it is the stamp duty value that is taken as the full value of consideration.
Why it is there
Sale deeds for land and buildings have long been written for less than the real price, and the stamp duty value is the one independent benchmark already fixed by another arm of the State. The section therefore substitutes that benchmark for the stated consideration, then softens it in two places: the agreement-date rule protects a seller whose price was honestly fixed earlier and part-paid through the banking system before values moved, and the 110% band prevents small valuation differences from converting into additions.
Who it applies to
A transferor of a capital asset being land or building or both, computing capital gains under section 72
A transferor who fixed the consideration by an agreement earlier than the date of registration and received part or full consideration on or before that date in specified banking or online mode
The Assessing Officer deciding whether to refer the valuation to a Valuation Officer
A Valuation Officer to whom a reference is made under sub-section (2)
An assessee who claims that the stamp duty value exceeds the fair market value of the property on the date of transfer
The figures, and what each one turns on
Read the condition in the same row. A figure quoted without it is a wrong answer with a citation attached.
What
Figure
The condition on it
Where
Tolerance band before the stamp duty value is substituted
110% of the consideration received or accruing from the transfer
If the stamp duty value does not exceed this, the actual consideration is deemed to be the full value of consideration for section 72
Sub-section (1)(b)
Alternative valuation date
The stamp duty value on the date of agreement
Available only if the agreement date fixing the consideration differs from the registration date and part or full consideration was received on or before the agreement date in specified banking or online mode as defined in section 66(32)
Sub-section (1)(a)
Ceiling on the value adopted after a reference to the Valuation Officer
The stamp duty value
Where the value determined by the Valuation Officer exceeds the stamp duty value, the stamp duty value is taken as the full value of consideration
Sub-section (3)
What this means in practice
The 110% figure is a cliff, not a slab. If the stamp duty value is within 110% of the consideration, nothing is substituted at all and the consideration stands; the moment it crosses that band, it is the whole stamp duty value — not the excess over 110% — that is deemed to be the full value of consideration. The agreement-date concession has two limbs and both must hold: the two dates must differ, and part or full consideration must have been received on or before the agreement date in specified banking or online mode as defined in section 66(32), so cash on the agreement date does not buy the earlier date. A reference to the Valuation Officer is not available for the asking either; the assessee must claim the stamp duty value exceeds fair market value, and the stamp duty value must not have been disputed in appeal or revision or referred to any other authority, court or the High Court. Even then the reference can only help — sub-section (3) makes the stamp duty value the ceiling, so a Valuation Officer's higher figure is discarded.
An example
Illustrative only, and invented for this page. The figures are chosen to show the rule biting, not taken from any real matter.
An individual sells a building for one crore rupees when the stamp duty value is one crore eight lakh rupees. Because that is within 110% of the consideration, clause (1)(b) applies and the one crore rupees stands as the full value of consideration for section 72. If instead the stamp duty value were one crore twenty lakh rupees, the band is crossed and the whole one crore twenty lakh becomes the full value of consideration, adding twenty lakh rupees to the computation. If the seller contends the property was worth less than that on the date of transfer and has not disputed the stamp duty value in any appeal or revision, the Assessing Officer may refer the valuation under sub-section (2); should the Valuation Officer return one crore thirty lakh rupees, sub-section (3) still holds the figure at one crore twenty lakh.
Where you meet this section
You meet this in the capital gains computation in a return on a sale of land or a building, and in the assessment order that adds the difference between the sale deed value and the stamp duty value. If the Assessing Officer accepts the fair market value claim, you meet it again through the Valuation Officer's reference under sub-section (2), which runs on the section 269(3) to (8) machinery.
The words themselves
the stamp duty value shall be deemed to be the full value of the consideration received or accruing as a result of such transfer
Section 78(1), Income-tax Act, 2025.
part or full consideration is received on or before the date of the agreement in "specified banking or online mode" as defined in section 66(32)
Section 78(1)(a)(ii), Income-tax Act, 2025.
If the value determined by the Valuation Officer on a reference made under sub-section (2) exceeds the stamp duty value, such stamp duty value shall be taken as the full value of consideration.
Section 78(3), Income-tax Act, 2025.
What people get wrong
Substituting only the excess over 110%. Once the stamp duty value exceeds 110% of the consideration, sub-section (1) deems the entire stamp duty value to be the full value of consideration.
Taking the agreement-date value merely because an earlier agreement exists. Clause (1)(a) also requires part or full consideration to have been received on or before the agreement date in specified banking or online mode as defined in section 66(32).
Assuming a Valuation Officer's report can raise the figure above the stamp duty value. Sub-section (3) caps the adopted value at the stamp duty value.
Seeking a reference after contesting the stamp duty value elsewhere. Clause (2)(b) allows a reference only where the stamp duty value has not been disputed in any appeal or revision and no reference has been made before any other authority, court or the High Court.
Applying the section to assets other than land or building. Sub-section (1) is confined to a capital asset being land or building or both.
What this replaced
The correspondence is the Income Tax Department’s own, from its comparison utility for the 1961 and 2025 Acts. A renumbering is the easy half; whether the words changed is the half that decides cases.
50C - Special provision for full value of consideration in certain cases
Rules of the Income-tax Rules, 2026 that work section 78. Where the rule’s own heading names the section we say so; the rest are marked on reading the rule, which is our derivation and not the department’s. A rule that serves the section silently and that we have missed will not appear here.
Rule 173 — Jurisdiction of Valuation Officers as per section 2(110) read with section 269 — on reading the rule
A circular binds the department, not you and not a court. Every one below was written under the 1961 Act; it reaches this section because the department’s own concordance carries the provision it names to this one.
Circular No. 8/2018 — Explanatory notes to the provisions of the finance act 2018 2018-12-26
Read this before you rely on it. Every decision below was decided under the Income-tax Act, 1961. It appears here because it is tagged to a 1961 provision that the department’s own mapping carries to section 78. That is an inference we have drawn, not a holding on the new section: where the words changed in the move, the reasoning may not survive. Treat this as the place to start looking, not as authority on the 2025 Act.
CIT v Vummudi AmarendranHigh CourtHelps taxpayertagged s.50C The circle rate rose between our agreement and the sale deed, and my year is earlier than the proviso. Is there a High Court holding on the…
Gouli Mahadevappa v ITOHigh CourtCuts both waystagged s.50C If the gain is computed on the stamp duty value, can I at least claim s.54F on everything I actually put into the new house?
Pramod R Agrawal v PCITHigh CourtHelps taxpayertagged s.50C I left a legitimate deduction out of my return and the assessment is over. Can the Commissioner allow it under s.264?
Sunil Kumar Agarwal v CITHigh CourtHelps taxpayertagged s.50C The AO adopted the stamp duty value and I never asked for a dvo reference. Can he do that?
Vidarbha Veneere Industries Ltd v ITOHigh CourtHelps departmenttagged s.50C The Tribunal orders say s.50C does not touch leasehold rights. Is that still safe advice?
Bansal Land Developers v ITOITATHelps taxpayertagged s.50C The stamp value rose between booking and registration and the AO added the difference under 43CA. Is that right?
Clayking Minerals LLP v ITOITATCuts both waystagged s.50C(2) I bought agricultural land below the jantri rate. Can s.56(2)(x) apply when the land is not even a capital asset?
Dharamshibhai Sonani v DCITITATHelps taxpayertagged s.50C I fixed the price in 2005 but registered the sale in 2007. Which date's stamp duty value applies?
Girdhari Lal v ITOITATHelps departmenttagged s.50C The land is recorded as agricultural in the revenue records. Is that enough to keep it outside s.2(14)?
ITO v Ketaben Janakbhai PatelITATHelps taxpayertagged s.50C The Assessing Officer has adopted in my assessment the stamp duty value that a co-owner's Assessing Officer used in the co-owner's case. Can he do…
ITO v Raj Kumar ParasharITATHelps taxpayertagged s.50C The AO substituted the circle rate under s.50C. Does that higher figure also become the net consideration I have to reinvest for s.54F?
Naina Saluja v DCITITATHelps taxpayertagged s.50C The officer sent my property to the Valuation Officer. Does that give him extra time to finish the assessment?
Noida Cyber park P Ltd v ITOITATHelps taxpayertagged s.50C I assigned my leasehold plot for less than the circle rate. Can the officer substitute the stamp duty value under s.50C?
The tolerance band is a gate, not a deductiontagged s.50C The stamp duty value is more than ten per cent above what we paid. Is the whole gap taxed, or only the part above ten per cent?
What this page does not tell you. It does not reproduce the section. Everything above was written from the section’s own text as the Income Tax Department publishes it — the text is here, and nothing here is advice on your facts. Where a figure matters, read the sub-section it comes from.