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Microlesson · 5-min read

Full Value of Consideration — Land & Building [Section 50C]

## Full Value of Consideration for Land & Building [Section 50C]

For transfer of land or building (or both), the sale consideration to be taken cannot be less than the Stamp Duty Value (SDV). This anti-evasion provision prevents under-reporting of property sale prices.

### Basic Rule

FVOC = Higher of:

  • Sale Price (actual consideration), OR
  • Stamp Duty Value (SDV)

### Safe Harbour (10% Tolerance)

If SDV ≤ 110% of Sale Price, then FVOC = Sale Price (SDV is ignored).

Case 1Case 2Case 3
Sale Price1,00,0001,00,0001,00,000
SDV1,08,0001,12,0001,10,000
110% of SP1,10,0001,10,0001,10,000
FVOC1,00,000 (SDV within 110%)1,12,000 (SDV exceeds 110%, higher taken)1,00,000 (SDV exactly 110%, within limit)

### Date of SDV — Agreement vs Registration

When date of agreement and date of registration are different:

  • If part / whole consideration is received by account payee cheque / DD / ECS / electronic mode on or before date of agreement → Take SDV on date of agreement
  • Other cases → Take SDV on date of registration

### Reference to Valuation Officer

If the assessee disagrees with the SDV (and has not disputed it in court), the AO may refer the matter to a Departmental Valuation Officer (VO).

FVOC after VO's valuation:

  • If Valuation Amount (VA) > SDV → FVOC = SDV (capped at SDV)
  • If VA ≤ SDV → FVOC = Higher of VA or Sale Price

Worked example

### Example 1

Example (VO Reference): Sale Price = ₹50 lakh; SDV = ₹80 lakh. AO refers to VO.

  • Case 1: VO determines VA = ₹90 lakh. Since VA > SDV, FVOC capped at SDV = ₹80 lakh.
  • Case 2: VA = ₹60 lakh. FVOC = Higher of (₹60 lakh, ₹50 lakh) = ₹60 lakh.
  • Case 3: VA = ₹48 lakh. FVOC = Higher of (₹48 lakh, ₹50 lakh) = ₹50 lakh.

⚠️ Common exam mistakes

  • Always taking SDV without checking the 10% safe harbour.
  • Taking SDV on date of registration even when part-payment was received electronically before agreement.
  • Allowing VO valuation to substitute SDV even when VA is higher than SDV (the law caps it at SDV — VO can only reduce, never increase).
  • Applying Section 50C to assets other than land and building (it is specific to L&B only).
Bare-Act text Section 50C · Income-tax Act, 1961 · click to expand
Where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed or assessable by any authority of a State Government for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed or assessable shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer: Provided that where the value so adopted does not exceed one hundred and ten per cent of the consideration received or accruing as a result of the transfer, the consideration so received shall be deemed to be the full value of the consideration.
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