Section 50C was applicable only on sale of capital assets. Builders were not required to pay the tax on actual sale consideration only as stock in trade is not covered by section 50C. To overcome this, Finance Act, 2013 has introduced a new section 43CA in the Income Tax Act, 1961. Section 43CA is applicable from Financial Year 2013-14 & is applicable for taxing the sale of immovable property held in the nature of stock in trade, in the same way as applicable for immovable property held in the nature of “capital asset” under section 50C of the Act.
Section 43CA reads as under:
Provision of section 43CA shall be applicable for ALL the real estate developers and builders who are dealing in real estate properties.