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Income-tax Act, 1961 | Chapter XX-C | Historical provision

Section 269UF: Consideration for Purchase of Immovable Property by Central Government

Section 269UF prescribed how consideration was calculated when the Central Government ordered the purchase of immovable property under the former Chapter XX-C pre-emptive purchase mechanism.

Current applicability: Under Section 269UP, Chapter XX-C does not apply to transfers of immovable property effected on or after 1 July 2002. Section 269UF is therefore primarily relevant to historical transactions, older purchase orders, and related disputes. It is not a current government-purchase procedure for ordinary new property sales.
On this pageMeaning and scopeSubsection (1): amount payableSubsection (2): damage to propertyKey statutory termsConnected provisions and official sources

What does Section 269UF provide?

The provision is titled Consideration for purchase of immovable property by Central Government. It contains two subsections. The first establishes the basic amount of consideration when an order is made under Section 269UD(1). The second permits a reduction for qualifying damage occurring between the agreement for transfer and vesting in the Central Government.

Section 269UF(1): Consideration equal to apparent consideration

Statutory rule: Where the Central Government makes a purchase order under Section 269UD(1), it must pay an amount equal to the apparent consideration for the immovable property.

The term apparent consideration is defined in Section 269UA. For a straightforward sale, it generally means the consideration specified in the agreement for transfer. The statutory definition contains separate rules for exchanges, leases, certain property rights, non-cash consideration and deferred consideration. It should not automatically be equated with the market value or stamp-duty value.

Under the historical scheme, the appropriate authority made the purchase order under Section 269UD; Section 269UF then determined the consideration payable.

Section 269UF(2): Reduction where the property was damaged

Subsection (2) operated as an exception to the amount ordinarily payable under subsection (1). A reduction could arise only where the relevant property suffered damage after the agreement for transfer but before vesting under Section 269UE, and the damage was not merely normal wear and tear.

Requirements for a reduction:
  1. An agreement for transfer had been made.
  2. The property was damaged before it vested in the Central Government under Section 269UE.
  3. The damage was other than normal wear and tear.
  4. The appropriate authority determined the reduction by order, recording its reasons in writing.

The provision did not authorize an unexplained or automatic deduction. The appropriate authority had to determine the sum to be reduced and record its reasons. The statute did not prescribe a universal fixed percentage for the reduction.

Important definitions and legal concepts

Apparent consideration

A defined term under Section 269UA used to calculate the statutory purchase amount. The method varies according to the nature and terms of the transfer.

Appropriate authority

The authority constituted under Section 269UB to carry out functions under Chapter XX-C.

Vesting

The statutory transfer of property or specified rights to the Central Government following a purchase order, governed by Section 269UE. Vesting is distinct from the earlier agreement for transfer.

Normal wear and tear

Ordinary deterioration from normal use or passage of time, as distinct from damage of the kind contemplated by Section 269UF(2). Whether particular deterioration qualifies depends on the facts.

How did the historical process work?

Under Chapter XX-C, an agreement and prescribed statement under Section 269UC could lead to a purchase order under Section 269UD. Vesting was governed by Section 269UE, consideration by Section 269UF, and the tender or deposit of consideration by Section 269UG. Section 269UH addressed re-vesting in specified circumstances involving failure to pay or deposit consideration.

The payment provision in Section 269UG generally required tender of consideration within one month from the end of the month in which the property vested, subject to its detailed statutory provisions. This payment timetable should not be confused with the calculation of consideration under Section 269UF.

Does Section 269UF apply to property transactions today?

No, not to transfers effected on or after 1 July 2002 under Chapter XX-C. The Finance Act, 2002 introduced Section 269UP to discontinue the application of that Chapter to such transfers. Historic matters may still require examination of the law applicable to the particular transaction and any relevant judicial orders.

Modern property transactions may involve other laws and tax provisions, including registration, capital gains and tax deduction at source. These are separate from the former pre-emptive purchase mechanism. For example, see the Income Tax Department's guidance on TDS for purchase of immovable property.

Income Tax Department: Section 269UFIncome Tax Department: Section 269UPIncome Tax Department: Section 269UGOfficial consolidated Income-tax Act, 1961 (Finance Act 2025)

This article explains a historical statutory framework and is intended for legal reference. For a pending or older matter, verify the relevant transaction date, original purchase order and applicable judicial decisions.