GUIDE LINES - CPWD

1 FOR OFFICIAL USE ONLY. GUIDE LINES . FOR VALUATION OF. IMMOVABLE PROPERTIES. VALUATION CELL. INCOME TAX DEPARTMENT. MINISTRY OF FINANCE. GOVERNMENT OF INDIA. 2009. SAROJ BALA, Member (Revenue) & Ex-officio Additional Secretary to the Government of India Department of Revenue Ministry of Finance Government of India New Delhi 110001. MESSAGE. I greatly value the collective efforts of entire Valuation cell Team to have come up with this much awaited compendium on the subject of valuation of immovable properties.

2 This compilation contains all the relevant material and updated guidelines on the subject of valuation covering its various legal and procedural aspects. I am sure that book on Guidelines for Valuation of Immovable Properties will be of great use to the Valuation Officers as well as Income Tax Authorities in estimating the value of immovable properties as required by the tax statutes uniformly throughout the country. (Saroj Bala). SACHDEV. Director General (Works). Central Public Works Department Nirman Bhawan New Delhi-110011.

3 MESSAGE. I am happy to note that Shri D. Hore, Chief Engineer (Valuation) NR, New Delhi, alongwith his team of officers has brought out a book Guidelines for Valuation of Immovable Properties , covering various legal and procedural aspects of valuation. Earlier also Valuation Cell had brought out publications from time to time. The Valuation Officers have to perform techno-legal functions which are entirely different from the normal activity of CPWD. When the offices from CPWD joined the Valuation Unit of , they have to acquaint themselves with the procedure for valuation of properties.

4 This compilation will go a long way in proper appreciation of the rules and regulations relating to the valuation of fixed assets. I hope that the book would be updated from time to time, in the light of the modification of Acts and interpretation of Acts by the Courts. ( Sachdev). OFFICE OF THE CHIEF ENGINEER (VALUATION). NORTHERN REGION. INCOME TAX DEPARTMENT. 11TH FLOOR, 3 TOLSTOY MARG, NEW DELHI-110001. Telephone No. 011 23313693, 23730726. FOREWORD. Income Tax including Capital Gains, Wealth Tax and Gift Tax are the direct taxes levied by Govt.

5 Of India. Any person having a property has to prove its valuation under the provisions of those taxes whenever the property is built, purchased, sold, inherited or gifted. To prevent undervaluation of land and building for tax evasion, valuation cell was created in 1968. The objective was to assist the assessing officers to ensure proper valuation of the properties for tax realizations. Initially it functioned as an advisory committee. The Valuation Cell in the present form was set up in 1972. In Taxation Law (Amendment) Act 1972 provisions for reference to Valuation Officers were made under sections 16A of Act, 55A of Act and 15(6) of Gift Tax Act with effect from Under these acts Valuation Officers were vested with statutory powers.

6 Valuation Cell had been quite effective in generating additional revenue. Further, its presence acts as a deterrent as would be evident from the PAC. report of 1990-91. ------- In purely technical sense the Valuation Cell is not only cost effective, but also there were other intangible benefits such as the tax paying public know that their property values are susceptible to verification by the Cell."---------- With a view to adopt uniformity in preparation of valuation reports by Valuation Officers, guidelines were prepared by Shri A.

7 Chattopadhyaya, Chief Engineer (Valuation), (North), New Delhi during October 1996, and were circulated in the Northern Region. Similarly Shri Dhawan, Chief Engineer (Valuation), Southern Region issued the guidelines during September-1999 and circulated to the Valuation Officers of the Southern Region. Thus the Valuation Cell of the Department has been following Guidelines for valuation of immovable Foreword properties which were defined long back. After theses guidelines were laid down, there have been several changes in the related acts.

8 Incorporating these changes and clarifying other issues various detailed instructions were issued by Shri Majumdar, the then (Val.), Northern Region during 2005-2007 for the Valuation Officers while evaluating the cost of the property. Similarly CE (Valuation) Southern Region also issued instructions from time to time. Considering all above it was felt that there is a dire need to issue updated guidelines, owing to modifications in the tax rules and multiplicities of various instructions issued on the subject.

9 It was also found necessary that same guidelines are followed by the officers in the Valuation Cell irrespective of the regions. Shri Singh, Chief Engineer (Valuation) Northern Region (Now ADG, NR), took a lead and with a view to compile updated guidelines and requested the Chief Engineer (Valuation) (Southern Region) and District Valuation Officers of both Northern Region & Southern Region to offer their comments on the existing guidelines and the instructions issued from time to time by respective Chief Engineers, (Valuation).

10 The arduous task of compiling the earlier guidelines, incorporating the instructions issued from time to time by the CEs, and the suggestions received from various DVOs, was entrusted to Shri Ravi Kant Soni, District Valuation Officer, Jaipur. The suggestions received from the CE (Val.) ( ) and DVOs were compiled by hectic efforts by Shri Ravi Kant Soni, DVO and the draft book was finalized, which incorporates all feasible modifications and it has the blend of experience gained during the intervening period also.