Property valuation is something that most people wish to get into but not sure if doing it is worth it or not. Well, be it to sell the property or get the right loan for the property you have liked, a property valuation can be of great help. Many people often mistake it with property valuation and real estate. But these two are different concepts. A real estate agent can always come and give you only the final price but when it comes to the property valuation, well, it is a valuer who will assess the house and give a legal document which can be verified worth for changing the property value. This is important in many ways.
Now if we focus on how the valuation for capital gains tax purposes then surely, you are at the right place to explore. A Valuation for capital gains tax can be of use in many ways. When there is any kind of profit earned on the sales it is counted to be an income tax as per the laws. You get the final profit only when you educate the acquisition price and even the improvement cost. If the property has been used for more than two years, then you get a chance to use the advantages of the indexation on the price. For the value which you had before the year 2001 April, you get the choice to get the fair market worth for the property.
The same goes for the amount which is stated in the agreement which could be less than that of the stamp duty property valuation. Usually, the stamp duty valuation of the pretty is said to be close to that of the fair market price. It is often considered at the time of sale. But if the agreed price is less as compared to that of the fair market price the seller and buyer both can have a heavy impact on it.
This is called the circle rate in which the price cannot be sold or purchased and the parties that are involved will have to do the registration process using the state fixed circle rate price. It is your valuer who can guide you well about it.
The same goes for the amount which is stated in the agreement which could be less than that of the stamp duty property valuation. Usually, the stamp duty valuation of the pretty is said to be close to that of the fair market price. It is often considered at the time of sale. But if the agreed price is less as compared to that of the fair market price the seller and buyer both can have a heavy impact on it.
Understand the difference:
You may not easily understand the difference between the fair market value and agreement value since you are new in this field. If the value is 5% then the buyer and seller will be taxed under different provisions. That is why it is important to ascertain the fair market deal before the agreement execution is done. This way the difference on the payment can be avoided rightly.How to know the right market value of a property:
To get the right valuation for capital gains tax purposes, you can get the estimation of the property rightly. But remember, the laws of income tax will not give you any kind of guidelines on how the fair market property value can be. But there are some ways by which it is [possible for you to get the fair market value estimation done. And the best part is it is acceptable by the tax department as well. However, to avoid any kind of underreporting of such sales agreement which means to avoid the payment on the stamp duty, the states have certain predefined prices for the con and area.This is called the circle rate in which the price cannot be sold or purchased and the parties that are involved will have to do the registration process using the state fixed circle rate price. It is your valuer who can guide you well about it.
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