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  • Property Valuation For Capital Gain Tax - Taxguru - in

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    Pradeep Lohumi
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    The document discusses property valuation for capital gain tax purposes. It presents a case study where a residential property inherited in 1965 was sold in 2021, and the entire sale amount was invested in another residential property. The key questions are: [1] Whether valuation of the original property as of 01/04/2001 is required to file tax returns, [2] If taking the circle rate valuation as of that date would suffice, and [3] Whether claiming a zero valuation as of that date such that the entire sale amount is treated as capital gains and exempt is correct. The document provides context on reasons for property valuation and factors considered in the valuation process.

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    Property Valuation for Capital Gain Tax- taxguru.in

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    The document discusses property valuation for capital gain tax purposes. It presents a case study where a residential property inherited in 1965 was sold in 2021, and the entire sale amount was invested in another residential property. The key questions are: [1] Whether valuation of the original property as of 01/04/2001 is required to file tax returns, [2] If taking the circle rate valuation as of that date would suffice, and [3] Whether claiming a zero valuation as of that date such that the entire sale amount is treated as capital gains and exempt is correct. The document provides context on reasons for property valuation and factors considered in the valuation process.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    Download as pdf or txt
    29 views3 pages

    Property Valuation For Capital Gain Tax - Taxguru - in

    Uploaded by

    Pradeep Lohumi
    The document discusses property valuation for capital gain tax purposes. It presents a case study where a residential property inherited in 1965 was sold in 2021, and the entire sale amount was invested in another residential property. The key questions are: [1] Whether valuation of the original property as of 01/04/2001 is required to file tax returns, [2] If taking the circle rate valuation as of that date would suffice, and [3] Whether claiming a zero valuation as of that date such that the entire sale amount is treated as capital gains and exempt is correct. The document provides context on reasons for property valuation and factors considered in the valuation process.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 3

    PROPERTY VALUATION FOR CAPITAL GAIN TAX

    AUTHOR :CA MANMOHAN JINDAL

    https://taxguru.in/income-tax/property-valuation-capital-gain-tax.html

    Case Study

    I received a case of Property Valuation

    Since I am a Registered Valuer –SFA but to serve the customer at one roof , we generally contact our fellow
    professionals to facilitate the customer

    Silent features of the case are

    -The Residential property is inherited to the customer in 1965

    -The property is sold in 2021 for Rs 80000.00 ( Notional Value)

    -The property purchased in 2021 for Rs 280000.00 ( Notional Value)

    -Since the whole amount is invested in another residential property , the Capital Gain is NIL

    -Question is that whether the valuation of the property is needed to value, still.

    -On enquiry, I am informed that the valuation is required for 01.04.2001 to file the return

    During the exercise, what I have learnt – is sharing for you.

    Why needed the Valuation

    1. Visa – Need Net worth certificate and Property Valuation

    2. Bank Loan

    3. Capital Gain Tax

    4. Dispute in Property

    5. Construction

    6. Company Property sold / share

    7. Inherited property – Property inherited from Father/Mother etc.

    NOTIFIED COST INFLATION INDEX UNDER SECTION 48, EXPLANATION (V)


    As per Notification no. 62/2022, dated 14-06-2022 following table should be used for the Cost Inflation Index:-

    Sl. No. Financial Year Cost Inflation Index


    (1) (2) (3)
    1 2001-02 100
    2 2002-03 105
    3 2003-04 109
    4 2004-05 113
    5 2005-06 117
    6 2006-07 122
    7 2007-08 129
    8 2008-09 137
    9 2009-10 148
    10 2010-11 167
    11 2011-12 184
    12 2012-13 200
    13 2013-14 220
    14 2014-15 240
    15 2015-16 254
    16 2016-17 264
    17 2017-18 272
    18 2018-19 280
    19 2019-20 289
    20 2020-21 301
    21 2021-22 317
    22 2022-23 331

    Factors for Valuation of Property

    1. Location – Corner, Highway, Roadside, Road Length Near Airport or Railway Station, Near Famous
    Mandir etc.

    2. Lease or Free hold

    3. GPA or Registry or Power or Attorney

    4. Kuccha or Pucca Makan

    5. Use of Property – whether rented or vacant

    6. Types of Construction – Marble flooring, Built up area, Floor rise etc.

    The list is illustrative only. Other factors may affect the valuation

    Points for Valuation


    1. Valuer should registered under Income Tax

    2. Valuer should be registered with IBBI

    3. Fair Market Value- should not be more than the Circle rate of 01.04.2001

    4. If no Circle rate that Fair Market value may be any sum subject to the satisfaction of the Authorities

    Kindly share on my mail the reply of three question:

    1. Whether valuation is compulsory required as on 01.04.2001

    2. If we take the valuation as the circle rate , it suffices

    3. Customer has suggested that if we take the valuation as on 01.04.2001 as zero then whole the sale
    amount is treated as capital gain and exempt from the purchase of another property. But I suggest that it is
    not the correct way to deal with. Kindly comment on this also.

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