FULL VALUE OF CONSIDERATION (SECTION 48)

   

Full value of consideration is the consideration received/ receivable by the transferor in respect of Capital asset being transferred and which may be received in Cash/ Kind. However these facts are noteworthy to this effect:

  • Adequacy or Inadequacy of Consideration is not a relevant factor for the purpose of determining the full value of consideration.

  • It does not make any difference whether full value of consideration is received in totality or, in installments during the previous year, since in both cases full value of consideration due will be taken for the purpose of calculation of computing capital gains.

  • In case of exchange, the full value of consideration will be the market value of the property transferred.

  • Following are the cases where instead of actual consideration, full value of consideration shall be the deemed value as specified: 

S No.

Section

Mode of Transfer

Deemed value of full consideration

1

45(1A)

Money/ Asset received from an insurer on account of damage/ destruction of capital asset.

Value of money received &/or Full market value of asset on the receipt date.

2

45(2)

Conversion of or treatment of Capital Asset into Stock in Trade

Full market value of asset on the date of its conversion or treatment.

3

45(3)

Introduction of Capital in kind into Firm or AOP/ BOI by a partner/ member.

Amount recorded in the books of accounts of Firm or AOP/ BOI as the value of Capital Asset.

4

45(4)

Distribution of Capital Asset in kind on dissolution of Firm or AOP/ BOI.

Full market value of assets on the date of distribution.

5

46(2)

Shareholders receiving assets from liquidator on the liquidation of a company

Market Value of the assets on the date of distribution less amount assessed as deemed dividend U/s 2(22)(e)

6

48(4)

Gift etc. of shares/ debentures allotted under ESOP.

Market value on the date of gift.

7

50C

Transfer of Land &/ or Building.

Value declared by the assessee or Value as assessed by Stamp valuation authority whichever is HIGHER.