If you are selling a property you have owned since before 2001, one number will shape a large part of your tax bill: the fair market value as on 1 April 2001.
Why the 2001 value matters
For property acquired before 1 April 2001, the law allows you to substitute the actual purchase price with the fair market value as on that date, and then apply indexation from there.
A flat bought for ₹2 lakh in 1988 might have a 2001 fair market value of ₹18 lakh. Indexed forward, that changes the taxable gain substantially.
How a registered valuer establishes it
- Circle rates for that locality as on 1 April 2001
- Comparable transactions registered around that date
- Land-and-building method with depreciated construction cost
- Physical inspection and title verification
The report sets out the method, the evidence and the reasoning, signed by a registered valuer. That signature is what makes it acceptable.