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Microlesson · 5-min read

Stamp Duty Value provisions on transfer of immovable property held as stock-in-trade – Section 43CA

## SDV Provisions for Immovable Property Held as Stock-in-Trade — Section 43CA

Applies to the transfer of land, building, or both held as stock-in-trade. It substitutes the Stamp Duty Value (SDV) for the actual consideration when the SDV is significantly higher.

### Determining revenue under PGBP

CircumstanceRevenue under PGBP
SDV does not exceed 110% of actual considerationActual consideration
SDV exceeds 110% of actual considerationStamp Duty Value

### Which date's SDV is taken?

CircumstanceDate for SDV
Advance received from buyer on/before the date of agreement, otherwise than in cashSDV on date of agreement
Advance received in cashSDV on date of transfer (registration)
No advance receivedSDV on date of transfer (registration)

> Note: The assessee may request the A.O. to refer the matter to a Valuation Officer to test the reasonableness of the SDV (detailed in the Capital Gains chapter).

Worked example

### Example 1

Example — within safe harbour. A builder sells a flat (stock-in-trade) for ₹40,00,000; SDV = ₹43,00,000. Since SDV (₹43,00,000) does not exceed 110% of ₹40,00,000 (= ₹44,00,000), revenue = actual consideration ₹40,00,000.

### Example 2

Example — SDV substituted. Sale consideration ₹40,00,000; SDV = ₹46,00,000. Since SDV exceeds 110% (₹44,00,000), revenue under PGBP = SDV ₹46,00,000.

### Example 3

Example — date of SDV. Agreement dated 1.4.2024 with ₹5,00,000 advance received by cheque; registration on 1.12.2024. SDV on the date of agreement (1.4.2024) is taken, because a non-cash advance was received on/before the agreement date.

⚠️ Common exam mistakes

  • Substituting SDV whenever it merely exceeds the consideration — substitution applies only when SDV exceeds 110% (the 10% tolerance band).
  • Always using the registration-date SDV — the agreement-date SDV applies if a non-cash advance was received on/before the agreement date.
  • Using the agreement-date SDV even when the advance was received in cash (cash advance forces the transfer-date SDV).
Reference: Section 43CA — Income-tax Act, 1961
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