An earlier agreement value needs its own evidence gate
For FY 2025–26 / AY 2026–27, section 43CA of the Income-tax Act, 1961 concerns land or buildings held otherwise than as capital assets. Where the consideration-fixing agreement and registration dates differ, subsection (3) permits the agreement-date assessable stamp value. Subsection (4) restricts that option to cases where consideration or part of it was received through a specified qualifying mode on or before the agreement date. A signed agreement alone is insufficient.
Read the applicable text: Income-tax Act, 1961: section 43CA, including subsections (3) and (4).
Build the agreement and receipt chronology
Retain the executed consideration-fixing agreement, registration record, customer ledger and receipt evidence. The statutory modes include account-payee cheque, account-payee bank draft and electronic clearing through a bank account, together with other prescribed electronic modes. Verify any additional mode under the applicable rules rather than assuming every payment description qualifies. Establish actual receipt, identity and timing; do not equate a journal entry or a promise to pay with the required receipt.
Obtain the right valuation for the right date
Keep agreement-date assessable value and registration-date stamp value in separate columns. A later valuation certificate should identify the date it values. A property’s book cost, sale price and stamp value serve different purposes. Resolve inconsistent unit numbers, areas and agreement dates before calculating an adjustment.
Apply the tolerance after selecting the supported reference
The ordinary proviso accepts actual consideration where the relevant stamp value does not exceed 110% of that consideration. If it exceeds the limit, do not simply add only the excess above 110%; apply the statutory computation and any applicable valuation-reference provisions. Section 43CA(2) brings in section 50C(2) and (3), so a disputed valuation requires its own supported analysis.
Do not carry an expired special concession into this year
The separate 120% residential-unit proviso has specified conditions, including transfers from 12 November 2020 to 30 June 2021. It is not a general 120% band for FY 2025–26. This guide uses the ordinary 110% comparison and assumes no separate valuation determination changes the example inputs.
Close a transfer-wise tax bridge
Record the selected valuation date, qualifying receipt evidence, relevant value, tolerance comparison and any difference from book consideration for each independent transfer. Do not pool unrelated properties merely to obtain an aggregate tolerance result. These references concern the stated return under the 1961 Act rather than mechanically substituting Income-tax Act, 2025 numbering.
Six worked illustrations
All facts and amounts are fictional. Calculations illustrate the stated assumptions, not a predetermined legal outcome.
Illustrative example 1: Timely qualifying part receipt
A company transfers trading property for ₹100 lakh. Agreement-date assessable stamp value is ₹108 lakh and registration-date value ₹120 lakh. A verified qualifying bank receipt of ₹5 lakh occurred on the agreement date. Assuming all conditions are met, the ₹108 lakh reference is within ₹110 lakh, so consideration remains ₹100 lakh under the ordinary proviso. Without that reference, the unmodified ₹120 lakh comparison would produce a ₹20 lakh difference.
Illustrative example 2: Receipt only after the agreement
Use consideration ₹100 lakh and the same ₹108 lakh/₹120 lakh values, but the only qualifying receipt occurs one day after the agreement. That fact does not satisfy subsection (4)’s on-or-before condition. On the assumed unchanged registration reference, ₹120 lakh exceeds ₹110 lakh and gives a ₹20 lakh upward difference, subject to any properly applicable valuation route.
Illustrative example 3: Cash is not the stated qualifying bank evidence
Consideration is ₹100 lakh, agreement stamp value ₹105 lakh and registration value ₹125 lakh. Only ₹5 lakh cash was received on the agreement date, with no qualifying receipt then or earlier. The cash does not establish the subsection (4) gate. The assumed registration reference produces a ₹25 lakh difference; do not select ₹105 lakh solely because an advance existed.
Illustrative example 4: Exactly at and above the boundary
With consideration ₹100 lakh and a supported agreement-date reference, ₹110 lakh is exactly 110% and retains ₹100 lakh consideration. A separate otherwise identical transfer with reference ₹111 lakh exceeds the limit and produces an ₹11 lakh difference on the unmodified inputs, not merely ₹1 lakh above the tolerance boundary.
Illustrative example 5: Part consideration can satisfy the gate without satisfying the tolerance
Consideration is ₹80 lakh; a verified qualifying ₹1 lakh receipt predates the agreement and the remaining ₹79 lakh arrives later. The supported agreement-date reference is ₹90 lakh. The tolerance figure is ₹88 lakh, so the reference still produces a ₹10 lakh difference on the assumed inputs. A valid receipt gate does not guarantee nil adjustment.
Illustrative example 6: Do not net independent transfers
Two independent property transfers each have consideration ₹50 lakh and properly selected reference values ₹56 lakh and ₹52 lakh. Each tolerance limit is ₹55 lakh. The first produces a ₹6 lakh difference and the second nil. Aggregating consideration ₹100 lakh and stamp values ₹108 lakh would incorrectly hide the first transfer’s issue.
Ten-step verification table
| Step | Action | Evidence |
|---|---|---|
| 1 | Confirm trading-property scope | Asset classification and transfer evidence. |
| 2 | Identify the consideration agreement | Executed terms and unit details. |
| 3 | Record registration separately | Registration date and valuation. |
| 4 | Verify the receipt mode | Bank instrument and applicable rule evidence. |
| 5 | Verify receipt timing | On-or-before agreement chronology. |
| 6 | Obtain agreement-date assessable value | Date-specific official valuation evidence. |
| 7 | Select the supported reference | Subsections (3) and (4) analysis. |
| 8 | Apply the ordinary comparison | 110% working per independent transfer. |
| 9 | Review any valuation dispute | Section 43CA(2) and relevant evidence. |
| 10 | Close the book-to-tax bridge | Selected values, differences and sign-off. |
Sixteen practitioner FAQs
1. Does section 43CA govern every capital-asset sale?
It addresses the specified non-capital-asset population.
2. Is an earlier agreement alone enough?
The subsection (4) receipt condition also matters.
3. Must full consideration be received by that date?
The text permits consideration or part thereof through the qualifying mode.
4. Can cash alone establish that condition?
It does not meet the listed qualifying bank or prescribed electronic-mode requirement.
5. Does a post-agreement receipt satisfy on-or-before?
Not merely because it precedes registration.
6. Does every electronic payment qualify by label?
Verify the applicable prescribed mode and evidence.
7. Does a customer ledger entry prove receipt?
Corroborate the actual transaction and date.
8. Which value belongs in the agreement-date column?
The relevant assessable stamp value for that date.
9. Is exactly 110% within the ordinary proviso?
Yes, the wording is does not exceed.
10. Is only the excess above 110% substituted?
Do not treat the tolerance as a deductible slab.
11. Does a valid earlier-date option guarantee no adjustment?
The selected reference must still be compared with consideration.
12. Can unrelated property values be pooled?
Test the actual independent transfers separately.
13. Does the historic 120% concession generally apply to FY 2025–26?
No; its specified transfer window ended on 30 June 2021.
14. Are valuation disputes irrelevant?
Section 43CA(2) imports the stated section 50C valuation provisions.
15. Do the examples calculate income-tax payable?
No. They isolate the full-value comparison and assumed upward difference.
16. What completes the evidence file?
Agreement, receipt, selected value and transfer-wise computation agree.
Official sources
Income-tax Act, 1961: section 43CA, including subsections (3) and (4)
Income Tax Department: section 43CA (2025 text)
Income Tax Department: Rule 6ABBA electronic modes
Income Tax Department: transition to the Income-tax Act, 2025