1. Applicability: Section 43CA specifically applies to land or buildings held as stock-in-trade (i.e., by builders). It seeks to address undervaluation in property transactions by relying on the SVA-assessed value, which is the basis for calculating stamp duty according to state government rules.
2.
Comparison of Sale Consideration and
SVA Value: If the sale consideration (the price the seller
claims to have received) for the land or building is lower than the value
determined by the SVA, the SVA value will be deemed the actual sale
consideration for tax purposes. This ensures that tax is paid on a higher, more
accurate property value rather than an artificially reduced sale price.
3.
110% Safe Harbor Rule:
There is a provision that allows some flexibility in this comparison. If the
SVA-assessed value does not exceed 110% of the actual sale consideration, then
the actual consideration received will be taken as the sale price for tax
purposes, and the tax will be calculated accordingly. This rule provides relief
in cases where the difference between the two values is minimal.
4.
Challenge to SVA Value:
If the seller believes the SVA value is higher than the fair market value at
the time of transfer, they have the option to dispute this. The seller can
request the tax officer to refer the case to a valuation officer (VO) for an
independent valuation. However, this option is available only if the SVA value
has not been disputed in any court or legal proceeding
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