How to Reduce Tax by Valuation of Property Report?

If you are an NRI (Non-Resident Indian) trying to sell your property in India, it is important to understand the concept of property valuation as it can help you save a significant amount of taxes. In this article, we will explain what property valuation is, how it works, and how it can benefit you as an NRI.

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What is Property Valuation?

Property valuation is the process of determining the fair market value of a property. A qualified and unbiased registered valuer usually provides an accurate estimate of the property’s worth. Moreover, the valuation report takes into account the historical sales data of similar properties in the vicinity to ensure an accurate and fair assessment.

How Property Valuation Can Benefit You as an NRI?

If you have bought or inherited a property before 2000, you have two options when you sell it. You can either use the purchase price as the cost basis or use the fair market value as the cost basis. Using the purchase price as the cost basis may result in a higher capital gain tax, as the property’s value may have appreciated significantly over time. This is where property valuation can come in handy.

If you choose to use a valuation report as the cost basis, it can help you save a lot of taxes. For instance, suppose you bought a property for one lakh rupees and are selling it for one crore rupees. The capital gain tax you may have to pay would be quite significant. The valuation report estimates the cost of the property as of 2000 to be around 30-40 lakh rupees if someone gets it done. By using this valuation report as the cost basis, you can significantly reduce the capital gain tax you would have to pay.

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Where to Find a Registered Valuer for Property Valuation?

A registered valuer is a qualified professional who is authorized to provide valuation services for various types of properties. If you are an NRI trying to sell your property in India, you can find a registered valuer through various channels. One option to consider is to contact a property consulting firm that has a network of registered valuers. They can connect you with a registered valuer who can provide you with a valuation report. The cost of a valuation report may vary depending on the property’s type, size, and location.

Conclusion

In conclusion, property valuation is an important concept that every NRI should understand when selling their property in India. By getting a valuation report done, you can significantly reduce the capital gain tax you would have to pay. It is advisable to seek the services of a registered valuer to ensure an accurate and unbiased valuation report. Additionally, if you have any further queries related to property taxes or sales by NRI, feel free to contact a property consulting firm that can provide you with the necessary assistance.