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Capital Gains Notice

Property / shares / mutual funds

Capital gains notices arise when the department finds a mismatch between sale consideration reported in your ITR and the value found in the Stamp Duty Authority (circle rate) or third-party data. Section 50C deems the stamp duty value as sale consideration if it is higher than the actual sale price.

⏱ 30 days to respond to scrutiny / demand notice

⚠️ Tax on short-computed gains + interest under 234B/234C

Common Issues in This Type of Notice

Stamp duty value vs actual sale price

Indexation benefit not allowed

LTCG on shares (Section 112A)

Section 54 exemption rejected

How We Handle It — Step by Step

Upload notice

Upload the capital gains related notice

Gains recomputation

Expert recomputes gains with proper indexation and deductions

Valuation dispute

Section 50C valuation challenged with DVO reference if needed

Exemption defence

Section 54/54F exemption claim supported with investment proof

Reply filed

Comprehensive reply with revised computation submitted

Documents You Will Need

Sale deed / agreement to sell

Purchase deed with registration details

Cost of improvement documents

Stamp duty valuation report

Section 54 investment proof (new property / bonds)

Demat account statements (for shares)

Relevant Case Laws & Precedents

CIT vs Shri Patil

Karnataka High Court

Where actual consideration is lower than stamp duty value, assessee can request DVO reference and is not bound by circle rate automatically.

Frequently Asked Questions

What is the Section 54 exemption?

Section 54 exempts LTCG on house property if you reinvest the proceeds in a new residential house within 1-2 years of sale.

Can I claim indexation on shares?

No. LTCG on listed shares under Section 112A does not allow indexation. The 10% tax applies on gains above ₹1 lakh.

What if the buyer and I agreed on a lower price than circle rate?

Under Section 50C, the stamp duty value is deemed to be the full value of consideration unless you apply for DVO valuation.