Clause 29B explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Clause 29B reports income chargeable under section 56(2)(x) — money, immovable property or specified property received without consideration or for inadequate consideration above the Rs 50,000 threshold, subject to the 10% tolerance and thirteen exclusions.
From the ICAI Guidance Note on Tax Audit (Revised 2026), the concluding edition under the Income-tax Act, 1961. Note that for tax year 2026-27 the valuation machinery is renumbered: rule 57 of the Income-tax Rules, 2026 replaces rules 11UA and 11UAA, with definitions in rule 56. The particulars themselves move to Form No. 26 under rule 47.
The limbs and thresholds clause 29B tests
Paragraph 50.2: where a person receives, in any previous year, from any person or persons, money, immovable property or other property and the stated conditions are satisfied, it is treated as income of the recipient:
| Limb | Condition | Amount charged |
|---|---|---|
| (a) Sum of money | Without consideration, aggregate value exceeding Rs 50,000 | The whole of the aggregate value |
| (b)(A) Immovable property | Without consideration, stamp duty value exceeding Rs 50,000 | The stamp duty value |
| (b)(B) Immovable property | For a consideration, where the stamp duty value exceeds the consideration by more than the higher of Rs 50,000 and 10% of the consideration | The excess of stamp duty value over consideration |
| (c)(A) Other property | Without consideration, aggregate fair market value exceeding Rs 50,000 | The whole of the aggregate fair market value |
| (c)(B) Other property | For a consideration less than the aggregate fair market value by an amount exceeding Rs 50,000 | The excess of fair market value over consideration |
For immovable property the shortfall must exceed the higher of Rs 50,000 and 10% of the consideration. For other property there is no percentage tolerance — the shortfall need only exceed Rs 50,000. A Rs 1 crore transaction in immovable property tolerates a Rs 10 lakh shortfall; the same shortfall on shares or jewellery is fully taxable and reportable at clause 29B.
Which date's stamp duty value
The first proviso: where the date of agreement fixing the consideration and the date of registration are not the same, the stamp duty value on the date of agreement may be taken.
The second proviso conditions it: the first proviso applies only where the consideration, or a part of it, has been paid by account payee cheque, account payee bank draft, use of the electronic clearing system through a bank account, or such other electronic mode as may be prescribed, on or before the date of agreement.
The third proviso supplies a dispute route: where the stamp duty value is disputed by the assessee on the grounds mentioned in section 50C(2), the Assessing Officer may refer the valuation to a Valuation Officer, and sections 50C and 155(15) apply to the stamp duty value for this sub-clause as they apply for valuation of a capital asset.
What "property" means for clause 29B — and what it excludes
Paragraph 50.2 records that "property" has the meaning in clause (d) of the Explanation to section 56(2)(vii) and shall include a virtual digital asset. The definition covers only these capital assets:
- immovable property being land or building or both;
- shares and securities;
- jewellery;
- archaeological collections;
- drawings;
- paintings;
- sculptures;
- any work of art; and
- bullion.
Paragraph 50.3: receipt of assets other than these would not be covered by the provisions of this section, and would therefore not be required to be reported. And: stock-in-trade, not being a capital asset, is also not covered.
Paragraph 50.4: fair market value of property other than immovable property means the value determined under Rules 11U and 11UA; the expressions "assessable", "fair market value", "jewellery", "relative" and "stamp duty value" take their meanings from the Explanation to section 56(2)(vii).
The exclusions that keep a receipt out of clause 29B
The first proviso lists receipts to which the clause does not apply — money or property received:
- (I) from any relative; (II) on the occasion of the marriage of the individual; (III) under a will or by way of inheritance; (IV) in contemplation of death of the payer or donor;
- (V) from any local authority as defined in the Explanation to section 10(20);
- (VI) from any fund, foundation, university, other educational institution, hospital, other medical institution, trust or institution referred to in section 10(23C);
- (VII) from or by any trust or institution registered under section 12A, 12AA or 12AB;
- (VIII) by any fund, trust, institution, university, educational institution, hospital or medical institution referred to in section 10(23C)(iv), (v), (vi) or (via);
- (IX) by way of a transaction not regarded as transfer under the enumerated clauses of section 47;
- (X) from an individual by a trust created solely for the benefit of a relative of the individual;
- (XI) from such class of persons and subject to such conditions as may be prescribed;
- (XII) by an individual, from any person, for expenditure actually incurred on medical treatment of himself or a family member for an illness related to COVID-19, subject to notified conditions;
- (XIII) by a member of the family of a deceased person — (A) from the employer of the deceased, or (B) from any other person or persons to the extent the sum does not exceed Rs 10 lakh — where the cause of death was an illness related to COVID-19 and the payment is received within twelve months from the date of death, subject to notified conditions.
"Family" for clauses (XII) and (XIII) means the spouse and children of the individual, and the parents, brothers and sisters of the individual or any of them, wholly or mainly dependent on the individual.
A further proviso: clauses (VI) and (VII) shall not apply where any sum of money or property has been received by any person referred to in section 13(3).
Paragraph 50.4 adds the reporting consequence: receipts which are exempt cannot be charged as income under section 56(2)(x) and are therefore not required to be reported under this clause. So clause 29B is answered only after every exclusion has been tested.
What the auditor does before answering clause 29B
Paragraph 50.4: the tax auditor should:
- obtain a representation from the assessee regarding any such receipts during the year, either received in his business or profession or recorded in the books of account of the business or profession; and
- scrutinise the books of account to verify whether receipt of any such amount or asset has been recorded therein.
On that basis, the auditor has to consider whether the question is to be answered in the affirmative or otherwise.
Paragraph 50.5: where the answer at clause 29B(a) is yes, the nature of income must state whether the income is by way of receipt of any sum of money, or from acquisition of any immovable property such as land or building, or property other than immovable property such as shares and securities, jewellery, drawings or paintings — and the value of income should be determined as provided in section 56(2)(x).
Worked example
| Receipt | Position |
|---|---|
| Land with stamp duty value Rs 1,10,00,000 bought for Rs 1,00,00,000 | Shortfall Rs 10,00,000 = exactly 10%, and the test is "more than" the higher of Rs 50,000 and 10% — not chargeable |
| Same land bought for Rs 95,00,000 | Shortfall Rs 15,00,000 exceeds Rs 10,00,000 (10% of Rs 1 crore is Rs 9.5 lakh) — Rs 15,00,000 chargeable |
| Unquoted shares of fair market value Rs 40,00,000 acquired for Rs 38,00,000 | Shortfall Rs 2,00,000 exceeds Rs 50,000, no percentage tolerance — Rs 2,00,000 chargeable; FMV under Rules 11U and 11UA |
| Plant and machinery received free from a group company | Not "property" as defined — not reportable |
| Flats received free by a builder, held as stock-in-trade | Not covered — not a capital asset |
| Rs 5,00,000 received from a brother | Excluded — from a relative |
| Rs 8,00,000 from the employer of a deceased employee, death from COVID-19, paid within twelve months | Excluded under clause (XIII)(A) |
| Virtual digital asset received without consideration, fair market value Rs 6,00,000 | Property — chargeable |
Audit checklist
- Obtain a representation on all such receipts in the business or recorded in its books.
- Scrutinise the books independently, including capital and reserve movements.
- Confirm the item is within the nine categories of "property", or is money; exclude stock-in-trade.
- Apply the Rs 50,000 threshold, and the 10% tolerance for immovable property only.
- Check the agreement date proviso and its payment mode condition.
- Compute fair market value of other property under Rules 11U and 11UA.
- Test each receipt against the thirteen exclusions before answering clause 29B, and against the section 13(3) carve-out from (VI) and (VII).
- State the nature of income by category, as paragraph 50.5 requires.
Common mistakes
- Applying the 10% tolerance to shares, jewellery or other movable property.
- Reporting at clause 29B assets outside the definition of "property", such as plant or vehicles.
- Using the registration-date stamp duty value where the agreement-date proviso applies.
- Using the agreement-date value without the account payee or electronic payment condition being met.
- Reporting exempt receipts that fall within the exclusions.