Special provision for the full value of consideration in certain cases.

Special provision for the full value of consideration in certain cases.

S-50C of IT Act, 1961

Consideration received from the transfer of a capital asset, being land or building or both

At a Value less than SDV – STAMP DUTY VALUE(for the purpose of payment of stamp duty in respect of such transfer)

The STAMP DUTY VALUE (SDV) shall be deemed to be the FVC (full value of the consideration) received or accruing as a result of such transfer.

What date shall be adopted for Computing Full Value Consideration (FVC)?

Where the date of the agreement for fixing the amount of consideration
And
the date of registration for the transfer of the capital asset is not the same,

the value adopted by the stamp valuation authority on the date of agreement may be taken.

Provided that the amount of consideration, or a part thereof, has been received by way of:

  • 1. A/c payee cheque or
  • 2. A/c payee bank draft or
  • 3. Electronic clearing system through a bank account or
  • 4. Through such other electronic mode as may be prescribed,

on or before the date of the agreement for transfer.

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Relaxation:-

Where SDV <= 110% of Consideration (as a result of the transfer),

Actual Consideration so received shall be deemed to be the FVC

What Happens If the Seller Does Not Accept the Value Adopted by SVA?

There is a possibility that the value adopted by Stamp Valuation Authority (SVA) may not be depicting the FMV at all times or the seller himself may not be satisfied with the value adopted by Stamp Valuation Authority (SVA) based on factors known to him.

Though stamp duty is generally borne by the purchaser, the purchaser may not be very concerned with the value adopted by SVA as it will be its cost of purchase.

S-194-O Payment of certain sums by the e-commerce operator to participant 

However, it makes a huge difference to the seller as it impacts his income tax which can be substantial based on the value.

 

As it is a matter of income tax for the seller, he is allowed to question the value adopted by SVA and claim the value is more than FMV under Section 50C before the income-tax authority unless such value is already questioned before any other authority or court.

In such cases, the income tax officer is required to make a reference to the valuation officer and market value will be determined by such a valuation officer.

The valuation officer, while determining market value, has to call for records/ documents from the taxpayer if required and give the taxpayer an opportunity of being heard and passing an order in writing, stating his valuation. Any value determined by the valuation officer can also be questioned before higher authorities.

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Extended due dates of Income Tax Return and Tax Audit

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Extended due dates of Income Tax Return and Tax Audit

Extended due dates of Income Tax Return and Tax Audit

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Those whose accounts do not require an audit and who typically file a tax return are eligible for the extension. Forms ITR-1 and ITR-4 are used to report income.

The Finance Ministry stated in a statement that the decision was based on taxpayers’ and other stakeholders’ allegations of difficulties in completing income tax returns and different audit findings for the 2021-22 assessment year under the Income Tax Act of 1961.

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Individuals’ ITR application deadlines were extended four times last year, initially from 31 July to 30 November 2020, then till 31 December 2020, and finally until 10 January 2021.

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The deadline for filing audit reports for the preceding fiscal year 2020-21 in conformity with all statutory provisions has been extended to January 15, 2022.

The deadline for filing an accountant’s report under Article 92F of the Act by anyone who made certain international or domestic transactions in the preceding year 2020-21 is now 31 January 2022.

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The deadline for submitting returns for the 2021-22 appraisal year, which was previously set for December 31, 2021, has been pushed back to February 28, 2022.

For the 2021-22 AY, the deadline for awarding pending or revised income refunds has been extended to March 31, 2022.2022.