Looking for your expert opinion. I have an offer to sell an inheritance property (1 acre land) which is higher than the guidance value (4x). This will be an arms-length transaction (not with friends or families). Looks like the guidance value has not been updated in TN since 2017 and the market value is higher. I would like to do this transaction clean and have this transaction registered closer to the market value for stamp duty, etc. (meaning all clean bank 2 bank transactions). Should I have to get a valuation report done? Would like to hear your thoughts?
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In general the market value is always higher than the government guidelines value.
However there's no hard and fast rule that you may have to sell your property as per the market value only.
You are not restricted from selling your property at a lower rate than the market value rate.
The stamp duty is paid by the buyer and not the seller.
The seller may have to pay the capital gains tax alone.
You can decide about the rate that you would like to sell your immovable property.
Valuation should be done. Circle rate in India ie rates by the government exist so that people do not evade stamp duty and tax.
The real price of the property will always be higher.
Registered sale deed can be executed at market value
pay stamp duty at market value declared in sale deed
no need for valuation report
1. Valuation report will inevitably be required.
2. If your buyer is ready and willing to register the sale deed at the market value then no harm in doing it.
there would be a problem if the property is sold below the guideline value and NOT when the property is sold ABOVE the guideline value
the guideline value is only a minimum value for the purpose of computation of stamp duty and to safeguard the revenue of the State
if the property is being sold at a value which is higher than the guideline value then obviously the State will earn more revenue as stamp duty is always paid on the HIGHER of the guideline value and agreement value
Dear sir,
1. It would be better if you go for a valuation of the property so that the correct value can be ascertained.
2. You can always sell the property higher than the guidance value as it is easy to disclose the source of income also and show the capital gain.
Thank you
1.You can get the sale deed registered showing that you have received higher consideration that then guidance value.
2. You shall have to pay stamp duty on the amount you are receiving towards consideration.
3.You won't have to obtain any valuation report for selling the property at a price higher than the Guidance Value/Circle Rate.
The guidance value/circle rate/government value always lag behind the commercial value of immovable property. Problem will be faced by you only if you intend to sell the property below government value. If you are willing to sell the property above government value you will not face any problem in transfer of sale consideration the only thing is, your buyer has to pay higher stamp duty. If he is ready your transaction will be above board in all legal aspects.
- Yes, you can apply for getting the valuation report from the competent authority for ascertaining the real value of the property
- However, at the time of registration of the property , circle rate fixed by that state will be considered for paying stamp duty.
- Further , even if you will sell the property less than that rate , then also stamp duty will be charged as per the circle rate and which is equivalent to market value .
