Section 80 of the Income-tax Act, 2025

Where this section sits

Section 80 is in Chapter IV — Computation of Total Income, which runs from section 13 to section 95.

← Section 79  ·  Section 81 →

What this section does

Where the consideration received or accruing on the transfer of a capital asset is either not ascertainable or cannot be determined, the section substitutes the asset's fair market value on the date of transfer as the full value of consideration for computing income under the head "Capital gains". It is a single sentence with no sub-sections and no conditions beyond the trigger, and it operates only for the capital gains computation.

Why it is there

Capital gains cannot be computed without a full value of consideration; the section supplies a default where the actual consideration is unascertainable, so the transfer does not escape charge for want of a number.

Who it applies to

• An assessee transferring a capital asset where the consideration is not ascertainable or cannot be determined

What this means in practice

The section engages only when there is genuinely no ascertainable consideration — not when the consideration is low, or thought to be understated. Where it does engage, the valuation date is fixed at the date of transfer, and "fair market value" is not defined here: the meaning comes from section 2(44), where it is the open market price and, if that is not ascertainable, a price determined in the prescribed manner.

An example

An individual transfers a capital asset under an arrangement in which no consideration is stated and none can be worked out, and files a return showing no capital gain on the footing that the computation is impossible. Section 80 supplies the missing figure: the asset's fair market value on the date of transfer is deemed to be the full value of consideration, so if that value is Rs. 3 crore the gain is computed against Rs. 3 crore and the transfer does not escape charge. The section does not work the other way — where the consideration is a known Rs. 2 crore that the officer thinks is understated, section 80 has no application, because it engages only where the consideration is not ascertainable or cannot be determined. The valuation date is fixed too: fair market value on the date of transfer, not on the date the question is raised.

Where you meet this section

In the capital gains computation in the return, and in the assessment order that substitutes fair market value for a consideration said to be unascertainable. The section names no form and no authority, and supplies no valuation method — 'fair market value' has to be taken from section 2(44), which falls back to a prescribed manner where the open market price is not ascertainable.

The words themselves

What people get wrong

• Using the section to displace a consideration that is known but considered inadequate. It applies only where the consideration is not ascertainable or cannot be determined.
• Looking for a valuation method in the section. There is none; "fair market value" is defined in section 2(44) and falls back to a prescribed manner where the open market price is not ascertainable.
• Valuing at a date other than the date of transfer.

What this replaced

• 50D - Fair market value deemed to be full value of consideration in certain cases

See the full 1961 to 2025 concordance.