Income Tax Act

Official PDF pages 146–150

SOURCE PDF PAGE 146
( ii )   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 );
( b )   if the stamp duty value does not exceed 110% of the consideration recei-
ved or accruing from such transfer, such consideration shall be
deemed to be the full value of the consideration for section 72.
(2) Without prejudice to the provisions of sub-section (1), the Assessing Officer may
refer the valuation of the capital asset to a Valuation Officer, and the provisions of
section 269(3) to (8), shall, with necessary modifications, apply in relation to such
reference, where—
( a )   the assessee claims that the stamp duty value exceeds the fair market
value of the property as on the date of transfer; and
( b )   the stamp duty value has not been disputed in any appeal or revision
or no reference has been made before any other authority, court or the
High Court.
(3) 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.
Special provision for full value of consideration for transfer of share other
than quoted share.
79.   (1) If the consideration received or accruing from the transfer of a capital
asset, being share of a company other than a quoted share, is less than the fair
market value of such share determined in the manner as may be prescribed, the
value so determined shall be deemed to be the full value of consideration received
or accruing as a result of such transfer for the purposes of section 72.
(2) The provisions of sub-section (1) shall not apply to any consideration received
or accruing as a result of transfer by such class of persons and subject to such con -
ditions, as may be prescribed.
(3) For the purposes of this section, the expression “quoted share” means the share
quoted on any recognised stock exchange with regularity from time to time, where
the quotation of such share is based on current transaction made in the ordinary
course of business.
Fair market value deemed to be full value of consideration in certain cases.
80.   If the consideration received or accruing from the transfer of a capital asset
is not ascertainable or cannot be determined, its fair market value on the date
of transfer shall be deemed to be the full value of consideration received or accruing
as a result of such transfer for the purposes of computing income under the head
“Capital gains”.
Advance money received.
81.   Where any capital asset was, on any previous occasion, the subject of nego-
tiations for its transfer, any advance or other money received and retained by
the assessee in respect of such negotiations—
( a )   shall be deducted from the cost for which the asset was acquired or
the written down value or the fair market value, as the case may be, in
computing the cost of acquisition;

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( b )   shall not be deducted from the said cost, where such advance or other
money has been included in the total income of the assessee for any
tax year as per the provisions of section 92(2)( h ) of this Act or section
56(2)( ix ) of the Income-tax Act, 1961 (43 of 1961).
Profit on sale of property used for residence.
82.   (1) Where an individual or Hindu undivided family—
( a )   has long-term capital gains arising from the transfer of a capital asset,
being buildings or lands appurtenant thereto, and being a residential
house, the income of which is chargeable under the head “Income from
house property” (original asset); and
( b )   has within one year before or two years after the date of such transfer
purchased, or has within three years after that date constructed, one
residential house in India (new asset),
then, instead of the capital gain being charged to income-tax as income of the tax
year in which the transfer took place, it shall be dealt with as follows:—
( i )   if the capital gains exceeds the cost of the new asset, such excess shall
be charged under section 67, and for computing capital gains arising
from the transfer of the new asset within three years of its purchase or
construction, the cost shall be   nil ; or
( ii )   if the capital gains is equal to or less than the cost of the new asset, no
capital gains shall be charged under section 67 and for computing capital
gains from the transfer of the new asset within three years of its purchase
or construction, the cost shall be reduced by the amount of the capital
gains.
(2) If the capital gains referred to in sub-section (1) is not used by the assessee to
purchase the new asset within one year before the date of transfer of the original
asset, or is not utilised for the purchase or construction of the new asset before
filing the return of income under section 263, then—
( a )   the unutilised amount shall be deposited in a specified bank or institution
and utilised as per the scheme notified by the Central Government;
( b )   such deposit shall be made before the filing of the return and not later
than the due date applicable in the case of the assessee for filing the
return of income under section 263(1); and
( c )   the proof of deposit shall be submitted along with such return.
(3) For the purposes of sub-section (1), the amount, already utilised for purchasing
or constructing the new asset, together with the deposited amount under sub-sec -
tion (2) shall, subject to sub-section (7), be deemed to be the cost of the new asset.
(4) If the amount deposited under sub-section (2) is not fully utilised for purchasing
or constructing the new asset within the period specified in sub-section (1), then,—
( a )   the unutilised amount shall be charged to tax under section 67 as the
income of the tax year in which the period of three years from the date
of the transfer of the original asset expires; and

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( b )   the assessee shall be entitled to withdraw such unutilised amount in
accordance with the scheme referred to in sub-section (2).
(5) If the capital gains under sub-section (1) does not exceed two crore rupees, the
assessee may, at his option, purchase or construct two residential houses in India,
and where such option has been exercised,—
( a )   for the purposes of sub-section (1)( b ), “one residential house in India”
shall be read as “two residential houses in India”; and
( b )   for the purposes of sub-sections (1)( b ) and (2), “new asset” shall mean
two residential houses in India.
(6) If during any tax year, the assessee has exercised the option mentioned in
sub-section (5), he shall not be entitled to exercise such option for the same tax
year or any other tax year.
(7) If the cost of new asset exceeds ten crore rupees, the amount exceeding ten crore
rupees shall not be taken into account for the purposes of sub-section (1).
(8) If the capital gains on the transfer of original asset exceeds ten crore rupees, the
amount exceeding ten crore rupees shall not be taken into account for the purposes
of sub-section (2).
Capital gains on transfer of land used for agricultural purposes not to be
charged in certain cases.
83.   (1) Where an assessee, being an individual or a Hindu undivided family,—
( a )   has capital gains arising from the transfer of a capital asset, being land,
which was used by the assessee or his parent, or the Hindu undivided
family for agricultural purposes (original asset), in two years immediately
preceding the date of transfer; and
( b )   has, within two years after that date, purchased any other land for being
used for agricultural purposes (new asset),
then, instead of the capital gains being charged to income-tax as income of the tax
year in which the transfer took place, it shall be dealt with as follows:—
( i )   if the capital gains exceed the cost of the new asset, such excess shall be
charged under section 67, and for computing any capital gains arising
from the transfer of the new asset within three years of its purchase, the
cost shall be   nil ; or
( ii )   if the capital gains is equal to or less than the cost of the new asset, no
capital gains shall be charged under section 67, and for computing any
capital gains arising from the transfer of the new asset within three years
of its purchase, the cost shall be reduced by the amount of the capital
gains.
(2) If the capital gains referred to in sub-section (1) is not utilised by the assessee to
purchase the new asset before filing the return of income under section 263, then—
( a )   the unutilised amount shall be deposited in a specified bank or institution
and utilised as per the scheme notified by the Central Government;

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( b )   such deposit shall be made before the filing of the return and not later
than the due date applicable in the case of the assessee for filing the
return of income under section 263(1); and
( c )   the proof of deposit shall be submitted along with such return.
(3) For the purposes of sub-section (1), the amount already utilised for purchasing
the new asset together with the deposited amount under sub-section (2), shall be
deemed to be the cost of the new asset.
(4) If the amount deposited under sub-section (2) is not fully utilised for purchase
of the new asset within the period specified in sub-section (1), then,—
( a )   the unutilised amount shall be charged under section 67 as the income
of the tax year in which two years from the date of the transfer of the
original asset expires; and
( b )   the assessee shall be entitled to withdraw such unutilised amount in
accordance with the scheme referred to in sub-section (2).
Capital gains on compulsory acquisition of lands and buildings not to be
charged in certain cases.
84.   (1) Where an assessee has—
( a )   capital gains arising from the transfer by way of compulsory acquisition
under any law, of a capital asset being land or building or any right in
land or building, forming part of an industrial undertaking belonging to
him, which was being used by the assessee for the business of the said
undertaking in the two years immediately preceding the date of transfer
(original asset); and
( b )   within three years after that date, purchased any other land or building or
any right in any other land or building or constructed any other building
for shifting or re-establishing the said undertaking or setting up another
industrial undertaking (new asset),
then, instead of the capital gain being charged to income-tax as income of the tax
year in which the transfer took place, it shall be dealt with as follows:—
( i )   if the capital gains exceeds the cost of new asset, such excess shall be
charged under section 67, and for computing any capital gains arising
from the transfer of the new asset within three years of its purchase or
construction, the cost shall be   nil ; or
( ii )   if the capital gains is equal to or less than the cost of new asset, no capital
gains shall be charged under section 67 and for computing capital gains
from the transfer of the new asset within three years of its purchase or
construction, the cost shall be reduced by the amount of the capital gains.
(2) If the capital gains referred to in sub-section (1) is not utilised by the assessee to
purchase the new asset before filing the return of income under section 263, then—
( a )   the unutilised amount shall be deposited in a specified bank or institution
and utilised as per the scheme notified by the Central Government;
( b )   such deposit shall be made before the filing of the return not later than
the due date applicable in the case of the assessee for filing the return
of income under section 263(1); and

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( c )   the proof of deposit shall be submitted along with such return.
(3) For the purposes of sub-section (1), the amount already utilised for purchas-
ing or constructing the new asset together with the deposited amount under sub-
section (2), shall be deemed to be the cost of the new asset.
(4) If the amount deposited under sub-section (2) is not fully utilised for the purchase
or construction of the new asset within the period specified in sub-section (1), then,—
( a )   the unutilised amount shall be charged under section 67 as the income
of the tax year in which three years from the date of the transfer of the
original asset expires; and
( b )   the assessee shall be entitled to withdraw such unutilised amount in
accordance with the scheme referred to in sub-section (2).
Capital gains not to be charged on investment in certain bonds.
85.   (1) Where an assessee has—
( a )   long-term capital gains arising from the transfer of land or building, or
both, (original asset); and
( b )   within six months after the date of such transfer, invested whole or part
of the capital gains in a long-term specified asset (new asset),
then, the capital gains shall be dealt with as follows:—
( i )   if the capital gains exceed the investment in the new asset, the amount of
capital gains as exceeds such investment shall be charged under section
67; or
( ii )   if the capital gains are equal to or less than the investment in the new
asset, the whole of such capital gains shall not be charged under section
67.
(2) For the purposes of sub-section (1), investment made in the long-term specified
asset from capital gain arising from transfer of one or more original asset shall not
exceed fifty lakh rupees,—
( a )   during any tax year; or
( b )   in the year of transfer of the original asset or assets and in the subsequent
tax year.
(3) If the new asset is transferred or converted (otherwise than by transfer) into
money within five years of its acquisition, the capital gains not charged under section
67 as per sub-section (1), shall be deemed to be income chargeable as long-term
capital gains in the tax year of its transfer or conversion.
(4) Any loan or advance taken on the security of the new asset shall be deemed to
have converted the new asset into money on the date of such loan or advance.
(5) Where the investment in the new asset has been taken into account for sub-sec -
tion (1), no deduction under section 123 for any tax year shall be allowed for such
investment.
(6) For the purposes of sub-section (1), “long-term specified asset” means any bond,
redeemable after five years and issued on after the 1st April 2018, by the National
Highways Authority of India constituted under section 3 of the National Highways
Authority of India Act, 1988 (68 of 1988) or by the Rural Electrification Corpora -