The list of valuers registered with the Income Tax Department for valuation of immovable property is generally uploaded by the Chief Commissioner of Income Tax in charge of the particular region and can be found on the Income Tax website.
However, it is not mandatory to obtain the value as of April 1, 2001 from any particular authorized person and it may even be calculated by the taxpayer.
In most cases, the stamp duty value as at 1 April 2001 is considered to be the acquisition cost of a property purchased before that date if the actual acquisition cost is lower.
The fair market value of the property as on 1st April 2001 for the purpose of calculating the acquisition cost cannot exceed the stamp duty value of the property. The stamp duty value can be calculated as per the circle rate available on the website of the Ministry of Stamps and Registration of the concerned state government.
To obtain the appraisal, it is necessary to select the specific area. However, it is advisable to obtain a valuation report from the certified appraiser in order to present it to the Treasury, if necessary, to justify the acquisition cost.
To claim capital gains exemption on sale of immovable property under Section 54 (assuming the sale is of a residential house), you will need to deposit the gains in the capital gains account within the due date for filing the income tax return.
You are also required to disclose the amount deposited in the capital gains account along with details such as date of deposit, account number and IFSC code of the capital gains account while filing the income tax return.
The amount is to be deposited in the capital gains account only up to the amount of unutilized balance of the gains to be reinvested in a residential house for claiming exemption under Section 54 or 54F (the amount to be reinvested is the consideration for sale of an asset other than a residential house).
The amendment to the Finance Act (No. 2) of 2024 allows the taxpayer to choose to pay taxes at a rate of 20% with indexation, or 12.5% without indexation in case of gains derived from the sale of long-term immovable properties from July 2024 onwards if the properties were acquired before 23 July 2024.
However, for the purpose of calculating the exemption under Section 54, the amount of profits to be reinvested in the residential home (and deposited in the capital gains account to the extent not utilized) will be calculated without indexation to the acquisition cost.
—Mahesh Nayak is a Certified Public Accountant at CNK & Associates
— If you have any queries about personal finance, write to us at [email protected] and get answers from experts.
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