Section 79 - Special provision for full value of consideration for transfer of share other than quoted share
Unquoted shares transferred below prescribed fair market value can be taxed using the Rule 57 valuation instead of the stated consideration.
Reviewed by CA Nikhil Gupta · Updated 9 October 2026
Section 79 is presented using the consolidated Income-tax Act, 2025 as amended by the Finance Act, 2026. The general commencement date is 1 April 2026. Earlier years and saved proceedings may remain governed by the Income-tax Act, 1961 and the repeal/savings framework.
2-minute professional decode
Unquoted shares transferred below prescribed fair market value can be taxed using the Rule 57 valuation instead of the stated consideration.
Who should test this section?
Section 79 matters to investors, property owners, promoters, companies, firms and advisers where the transaction involves special provision for full value of consideration for transfer of share other than quoted share; the charge, computation and relief steps should be separated.
Evidence to retain
The section 79 file should preserve acquisition and transfer instruments, valuation or stamp records, payment evidence, holding-period material and every document that supports the treatment of special provision for full value of consideration for transfer of share other than quoted share.
1961 Act bridge
| Legacy provision | Legacy heading | Mapping |
|---|---|---|
| 50CA | Special provision for full value of consideration for transfer of share other than quoted share. | Renumbered / mapped |
The bridge is a research aid. Legacy case law carries over only after the current wording and transition rules are matched.
Rules and forms linked to this section
Worked application
Unquoted shares are sold to a related party below Rule 57 fair market value. The statutory fair value may become the seller’s deemed consideration.
Common mistake
For section 79, do not jump from sale proceeds to a capital-gain number: first identify the transfer/charging event, then consideration, cost, timing and any exemption or rollover condition relevant to special provision for full value of consideration for transfer of share other than quoted share.
Compliance approach
Identify the statutory trigger for section 79, lock the relevant tax year, reconcile the facts to the operative sub-section, preserve the evidence trail and separately test every linked Rule, Form, Schedule and exception before finalising the return position.
Numeric / timing checkpoints in the operative text
- No standalone numeric checkpoint should be inferred from the heading; read the operative text.
Related provisions
Current statutory text
Primary-source trail
- Consolidated Income-tax Act, 2025 (as amended by Finance Act, 2026) (official external source)
- Income Tax Department - Act/Rules/Forms hub (official external source)
- CBDT commencement material - Act operative from 1 April 2026 (official external source)
- Income-tax Rules, 2026 - Notification No. 22/2026 (official external source)
Source status: full Section 79 statutory text in the local source corpus; reconciled to the current consolidated Act control on 8 October 2026.