• Where market price is lower than the circle rates

Circle rates in Delhi have increased threefold over 3 years. My property as per circle rates is valued at 68 Cr whereas the market price is only 50 Cr. All properties in that area face a similar dilemma. Why should I have to pay 30% gift tax on 18 Cr ? There has to be some remedy.
There is an appeal before the Delhi High Court for putting a stay on this arbitrary & massive increase but I cannot wait indefinitely.
Asked 2 years ago in Property Law from New Delhi, Delhi
1) according to Special inspector general (registration), transactions should not be affected by high circle rates.
“Circle rate is just an indicative rate. If you have registered property on an amount lower than the circle rate, the sub-registrar will register it and the case will be sent to the registrar to verify the market value,

2) .the  high circle rates have badly affected property transactions in delhi

3)  section 50C of the Income-tax Act, 1961 clearly mentions that the liability on capital gains would arise on the value of the property as fixed by the state valuation authority which generally is the Sub-Registrar. Thus, capital gains tax would be calculated on the value of the property as fixed by the Stamp Valuation Authority especially when such value is higher than the declared value of the property as appearing in the sale deed.

4) Sub-sections (2) and (3) of Section 50C provides further safeguard to the assessee, in the sense that if the assessee claims before the assessing officer that the value adopted by the stamp duty authorities exceeds the fair market value and the value so adopted or assessed for the purpose of stamp duty has
not been disputed in any appeal or revision before any authority, the Assessing Officer could refer the valuation of the capital asset to the Departmental Valuation Officer. On such reference, if the value determined by the Valuation Officer is more than the value adopted or assessed by the stamp duty authority, the Assessing Officer shall adopt the market value as determined by the Stamp duty authority. Thus, a complete foolproof safeguard has been given to the assessee to establish before the authorities
concerned the real value. 

5)PIL is pending before delhi high court that  circle rate notifications and policy had violated the provisions of the Stamp Act and the Delhi Municipal Corporation (DMC) Act with regard to stamp duty and registration.
“This leads to a pitiable situation where the prescribed circle rates are completely arbitrary and unreasonable and are much higher than actual/market rates. The objective behind the Stamp Act, as well as the Under-Valuation Rules, was to prevent undervaluation of instruments — not to create a reverse situation where the prescribed circle rates exceed the actual market value of the property. This illegality is further compounded by the fact that the prevailing circle rates policy (as set out above) denies parties the rights and safeguards expressly set out in the Act,” the plea says.
Ajay Sethi
Advocate, Mumbai
23123 Answers
1214 Consultations
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1. You can file an application before the Sub-Registrar complaining about the exorbitantly fixed high circle rate,

2. The Sub-Registrar will forward the said application to the Registrar for his consideration,

3. You can file an application before the Assessment Officer praying for valuation of the property by departmental valuation Officer claiming that higher amount of price has been taken in to consideration while fixing the circle rate fior which the stamp duty has been collected,

4. You can also file a W.P if you fail to get justice from the Authorities.
Krishna Kishore Ganguly
Advocate, Kolkata
12043 Answers
228 Consultations
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1. The circle rates have indeed sky rocketed in Delhi. 

2. You may draw the attention of sub-registrar to the discrepancy between the circle rate and market rate through an application, but this is not likely to solicit a reply much less a satisfactory reply.

3. You can also write to the Assessing Officer for a valuation to be conducted through a valuation officer as the fair market value is lower than the circle rate. 

4. Last but not least, you can move the Delhi High Court.
Ashish Davessar
Advocate, Jaipur
18063 Answers
446 Consultations
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